Manuka reaches full Wonawinta gold capacity as silver commissioning nears

Wonawinta Moves From Recommissioning Into Gold Sales

Manuka Resources Limited (ASX/NZX:MKR) has crossed the most important operational threshold in its September quarter: Wonawinta is producing gold again and has begun generating revenue. Processing restarted on 22 August after a five-month recommissioning programme, with the plant treating 43,270 tonnes of Mt Boppy material during the quarter at an average head grade of 0.81g/t gold.

The plant achieved average recoveries of 72%, leaving approximately 797 ounces of gold in circuit at 30 September. That figure represents gold recovered into the circuit, not necessarily gold sold during the quarter. The first refinery deliveries began in October, and Manuka subsequently reported its first gold revenues, full gold processing capacity and a third delivery to ABC refinery by 29 October.

Capital Raised To Fund The Restart And Silver Upgrade

The restart was backed by a substantial equity injection. Manuka raised A$14.5 million through a placement of 207.1 million shares at A$0.07 each, an earlier transaction covered in the September share placement, while its shareholder purchase plan added approximately A$334,000. The funds are intended to complete the Wonawinta silver de-slime circuit and provide working capital during the production ramp-up.

That funding came at a cost beyond dilution. The company said freight, installation and construction costs had increased and the production timetable had extended by about three months. The upgraded silver circuit is scheduled to begin commissioning in early 2027, with combined gold and silver processing planned to follow, subject to execution of the remaining work.

Pipeline Ridge Adds A Potential Ore Source

Manuka is also trying to build a second gold feed source around its Cobar Basin processing hub. Phase 1 RC drilling at Pipeline Ridge, following the Pipeline Ridge resource drilling, returned selected shallow intersections including 32 metres at 7.98g/t gold from 34 metres, 8 metres at 12.96g/t from 37 metres and 5 metres at 8.59g/t from 37 metres.

Those results are downhole lengths and true widths have not yet been established with sufficient confidence. Geological modelling and an initial Mineral Resource Estimate are now in progress, while a second drilling phase targeting depth and strike extensions is planned. Any future contribution to Wonawinta would also require regulatory approvals, so Pipeline Ridge remains a development opportunity rather than an operating source of ore.

Low Cash Balance Keeps Execution Risk In Plain Sight

The quarter’s operating progress sits alongside a notably tight balance sheet. Manuka ended September with A$581,000 in cash, A$60.1 million in borrowings and net operating cash outflows of A$9.74 million. It also spent A$10.96 million on property, plant and equipment, while financing activities provided a net A$13.46 million after equity transaction costs and debt repayments.

Appendix 5B calculations put available funding at A$3.58 million, including A$3.0 million of unused facilities, equivalent to 0.37 quarters of funding at the quarter’s outflow rate. The narrative section refers instead to A$4.5 million of unused facilities, an inconsistency that investors will need to reconcile. Manuka said it does not expect the September operating outflow to continue because production inflows began in October, but it also confirmed that no further equity raising steps had been taken since September.

Silver Commissioning Is The Next Financial Test

The Wonawinta silver reserve provides a larger medium-term base, with the Probable Ore Reserve increased to 7.9 million tonnes at 50.4g/t silver, containing approximately 12.8 million ounces. The immediate question is whether gold sales can generate enough regular cash to support operations and debt obligations while the silver circuit is commissioned.

Weekly gold sales, refinery deliveries, plant recoveries and the early-2027 silver commissioning schedule will provide the clearest evidence of whether the restart has become a self-funding operation. Until those figures emerge, the production milestone is meaningful, but the balance-sheet buffer remains limited.