LE Minerals’ cash pile gives its graphite spin-out room to move

Solaroz sale turns exploration loss into statutory profit

LE Minerals Limited (ASX:LEL) ended FY2026 with a $48.17 million profit, but the headline number came from a transaction rather than ongoing operations. The company recognised a $58.14 million after-tax gain on the disposal of its Solaroz lithium project interest in Argentina, completed through the second tranche in December 2025.

Continuing operations recorded a $9.21 million loss before tax, against income of $2.20 million. The annual report therefore offers a familiar explorer’s accounting contrast: a sizeable statutory profit, alongside a business that is still funding exploration rather than generating operating revenue. The Solaroz transaction contributed 51.2 cents of earnings per share from discontinued operations, while continuing operations produced an 8.2-cent loss per share.

The balance sheet is the more consequential part of the result. At 30 September, LE Minerals reported gross cash of $8.66 million, $47.71 million in term deposits and net cash of $56.31 million, equivalent to $0.503 per issued share. At 30 June, cash and term deposits totalled $60.18 million. Operating activities consumed $5.87 million during FY2026, while exploration and evaluation expenditure rose to $6.11 million.

Graphite transaction heads towards a critical vote

The most immediate corporate catalyst is the proposed sale of the Burke, Mt Dromedary and Corella graphite projects to M Battery Materials (proposed ASX:MBM) for total consideration of $20 million. MBM has lodged an IPO prospectus seeking to raise between $15 million and $25 million at $0.50 a share, taking the transaction into the execution phase described in the MBM IPO prospectus.

Under the revised structure, the cash component will be set by the amount ASX permits as reimbursement of LE Minerals’ expenditure, with a floor of $2 million and a ceiling of $5 million. The balance will be paid in MBM shares. LE Minerals shareholders are due to vote on the graphite sale at a general meeting on 20 November, while completion remains subject to MBM’s ASX admission, shareholder approval and other conditions that must be satisfied or waived by 22 December 2026 unless extended.

The transaction’s value has not changed, but access to the scrip consideration has become less straightforward. ASX has advised that shares issued to LE Minerals as promoter, related parties and associates are expected to face 24-month escrow from MBM’s quotation, while shares distributed to other LE Minerals shareholders are expected to face 12 months from issue. LE Minerals says it intends to seek approval to distribute 75% of the consideration shares after the applicable escrow period, with taxation treatment still to be clarified through its 2026 tax return and engagement with the ATO.

Capricorn advances through data gathering after mixed drilling

LE Minerals is retaining its 51% interest in the Capricorn Gold-Copper Belt Project in central Queensland and has the right to acquire the remaining 49% by April 2027. The company completed 12,171 line-kilometres of airborne magnetic, radiometric and electromagnetic surveys, then collected 1,777 soil samples and 149 rock-chip samples across 16 target areas. Assay results from that surface program are expected during the fourth quarter of 2026.

The exploration story is not uniformly positive. First-pass drilling at Sandy Creek returned no significant assay results, as did air-core and diamond drilling at Bajool. LE Minerals is now combining the new geophysical data with geochemistry and historical exploration to prioritise future targets, rather than presenting the completed programs as discoveries.

White Plains confirms lithium-bearing upper aquifer

At the 100%-owned White Plains project in Utah, 12 direct-push holes drilled on an approximately 2-kilometre grid returned lithium grades of 52 to 114 mg/L from brine sampled between 13 and 15 metres. Infill surface auger samples returned 55 to 101 mg/L where brine was intercepted, although five southern sites failed to encounter surface brines. The results extend the exploration case for the Upper Aquifer, which prior magnetotelluric work indicated could persist to at least 30 metres.

That work remains an exploration result, not a resource or development decision. The company has indicated that it intends to work towards a maiden JORC Mineral Resource, but the report provides no resource estimate, production plan or economic study for White Plains.

Cash allocation becomes the central investment question

LE Minerals says it will use existing cash to advance Capricorn and White Plains while retaining funds for new resources-sector opportunities in Australia and North and South America. The board also intends to return capital through the proposed in-specie distribution of MBM shares, subject to the graphite sale and further shareholder approval. The annual report records 18 million unlisted executive options issued at a $0.60 exercise price, adding another consideration for shareholders as capital is redeployed.

The next few months will separate balance-sheet optionality from delivery. The November vote, MBM’s IPO and ASX admission, the final escrow position, the tax treatment of any distribution and the remaining graphite drilling assays will determine how much of the portfolio’s stated value becomes accessible to shareholders rather than remaining conditional.