Red Hill turns a royalty into a 75% Thomson gold-copper option

Red Hill Minerals Limited (ASX:RHI) is turning a modest royalty holding into a potential controlling stake in one of New South Wales’ largest underexplored gold-copper projects. The company has signed a binding Heads of Agreement with Legacy Minerals Holdings Ltd (ASX:LGM) covering the 5,407 km² Thomson Project, beginning with a $2 million exploration program and a staged option to earn 75% of the project.

$2 Million Drilling Program Targets Thomson

“Including the 1.5% NSR Royalty Tenements2 and EL9728.”

Red Hill will manage and fund an initial 12-month program, including at least 1,500 metres of diamond drilling across a minimum of two targets. The work will focus on priority magnetic targets described as drill-permit ready and untested, with the project considered prospective for intrusion-related gold-copper mineralisation.

The first stage applies to the two Thomson tenements over which Red Hill already holds a 1.5% net smelter royalty. Once the $2 million program is completed, Legacy’s existing right to buy back that royalty will be extinguished. That right allowed Legacy to acquire half of the royalty for $2 million and the remaining half for a further $4 million.

Further Spend Opens 75% Farm-In

Red Hill can then elect to spend another $4 million over 48 months to earn a 75% interest in all three Thomson tenements, including EL9728, which is not currently covered by the royalty. The company must complete the initial $2 million commitment before it can withdraw, but the second-stage spending is an option rather than a firm obligation.

If Red Hill completes the earn-in, the parties may establish a joint venture with Red Hill holding 75% and Legacy 25%, with Red Hill initially acting as manager. Red Hill may also elect to withdraw at that point. Under the agreement, the 1.5% royalty would apply across all three tenements in a joint venture, excluding Legacy’s share of production; if Red Hill withdraws, it would retain the royalty over production from all three tenements.

Red Hill acquired the existing royalty for $220,000 in 2025, making the initial commitment a substantially larger bet on exploration than the original acquisition cost. The arrangement is still conditional on Red Hill completing due diligence and Legacy securing any required access agreements, while the announcement provides no drilling results, resource estimate or indication that the magnetic targets will produce an economic discovery.

The immediate test is therefore operational rather than financial: whether Red Hill can move the program from agreement to drill sites and generate meaningful results from at least two targets. Those results will determine whether the royalty becomes the company’s preferred exposure to Thomson or the first step towards a much larger 75% exploration position.