Timing is Everything: Gold price reignites historic Bullabulling mine for Tim Goyder's Minerals 260

News.com.au

12-05-2025

Gold prices have surged this year, sparking M&A and fast-tracking new developments in Australia
Tim Goyder's Minerals 260 is looking to revive the 2.3Moz Bullabulling gold mine
80,000m drill program has started ahead of resource upgrade and PFS
ASX mining's Midas character Tim Goyder says we are in the best market for new gold developments in "70 to 80 years" after pulling off an "audacious" deal that could create WA's next mid-tier gold producer.
One of five ASX vehicles where the money man behind Liontown Resources (ASX:LTR) and Chalice Mining (ASX:CHN) has made his fortune, Minerals 260 (ASX:MI6) has begun an 80,000m drill campaign to improve its confidence in the 2.3Moz Bullabulling gold project ahead of modern project studies.
The mine west of the historic Goldfields town of Coolgardie – where gold was first discovered in 1892 – has famously missed a string of gold booms, after being folded into the global portfolio of $100bn Chinese gold, copper and lithium giant Zijin Mining.
Previously an unheralded junior explorer, minnow MI6 wrapped up one of the deals of the year in January 1, beating out larger players with a $165 million deal to acquire the mine.
The catch? MI6 was worth just $30m at the time. It would take close to three months to lock up the $220m of fresh capital needed to get the deal across the line.
In the interceding period, Donald Trump's tariff policy sent investors flocking for safe haven, pushing gold to record highs. A major backdown from both the US and China on the scale of their reciprocal tariffs (from 145% and 125% to 30% and 10% respectively) sent bullion over US$100 down last night to a touch over US$3200/oz.
That's still 28% higher over the past six months, with handy exchange rates seeing Aussie dollar gold lifting a remarkable $700/oz since the deal was announced.
"Clearly this is the most exciting period for gold for the last 70 or 80 years, so I'd say the way it's gone. It's risen since we've done the deal about $700 an ounce in a matter of three months," Goyder said at Coolgardie's iconic Denver City Hotel yesterday.
"So it is exciting. And the world has shifted. The central banks around the world are buying gold and that says something about the economy, doesn't it?"
The upside
Minerals 260 is chaired by Goyder, the firm's second largest shareholder with a 7.26% stake, and led by managing director Luke McFadyen, whose impressive resume includes four years as head of portfolio strategy and economics at OZ Minerals, a role which culminated with the copper miner's $9.6bn sale to BHP.
This time on the other side of the deal, he saw the value latent in an unloved asset that didn't meet the investment hurdles and technical properties Zijin favoured.
Studied as a heap leach, MI6 will pursue a conventional heap leach for the project, which has a resource running 60Mt at 1.2g/t for 2.3Moz.
Around 55,000m of the drilling, currently being conducted via three RC rigs and one diamond, will consist of infill drilling to improve the confidence level of the resource, largely at the key Bacchus deposit.
It's one of four bulk, low grade open pits along an 8.5km strike trending north to south across the tenement package. Another smaller pit, Gibraltar, runs east to west on the other side of the property, but is surrounded by potentially mineralised ground yet to be tested.
Located 65km from Australia's gold capital of Kalgoorlie, Resolute Mining (ASX:RSG) mined out the oxide resources in the late 1990s to a depth of around 70m at Bullabulling when gold was fetching just $500/oz.
Modern resources have been cut at a gold price of just $3000/oz Aussie and the deepest point of the resource is just 250m underground. Holes in the current program will extend as far as 500m deep.
Aside from the raging gold price, that attention to detail is partly why McFadyen thinks MI6 can do what Zijin couldn't.
"I think it sat in the wrong company. It's a $100 billion Chinese company that don't do exploration. And very similar to my experience in buying other projects from other big companies, they just ... don't see it how we see it," McFadyen said.
" So to the cynics, we'll wait to prove you wrong and we look forward to it.
"Ultimately, this has got 530,000m of drilling in it, so you can't fake that. Some of these drill holes are 20m by 20m. So it's been extensively understood, it's had multiple resource updates.
"And so we're pleased to be able to prove these people wrong in the future."
How big could it be?
MI6 was capped at $270m on Monday, but exploration and study success could well move it into another strata of Aussie gold plays.
McFadyen thinks it could become a regional play, with the development of the Bullabulling project to open up small satellite prospects that could be held on nearby tenements.
An early sighter of that strategy came last week via an option deal over tenements to the north of Bullabulling owned by Argentine copper explorer Belararox (ASX:BRX), expanding its territory to 570km2.
Analysts and brokers are already beginning to map out the long-term future for the project in a buoyant gold environment. Argonaut thinks a 5Mtpa open pit could produce a "base case" 140,000ozpa.
Goyder told reporters the aim would be to become a company producing 'in the order of' 150,000oz a year.
With a resource upgrade due in December, McFadyen noted it would be up to the pre-feasibility study results to show how big the mine – on a timeline to enter production in H2 2028 – would be.
But he said Bullabulling was the "foundation of a fantastic company".
"If you look at similar sized resources and what they produce, you've got a substantial production profile, both in annual production as well as length of production," he said. "This is a big project, you don't often see 2-plus million ounces one hour's drive away from Kalgoorlie Airport."
New breed
Euroz Hartleys analyst Michael Scantlebury said the rise in the gold price this year had the potential to underpin a new generation of gold developers.
It comes with the large end of town cashing in. Euroz's quarterly gold review showed free cash flow generation across ASX gold miners bounded beyond $1bn for the first time in the March quarter.
"You're seeing a lot of those once marginal producers generating strong cash flows, proving that this next round of developers really can make solid margins at today's pricing," he said.
" As much as people ... may think that these assets have been tried and tested before, a lot of them, especially with MI6, are coming out of larger companies that just didn't make sense for them to spend the capital.
"I think that at today's pricing you're going to see these developers actually come online and be successful."
While the gold price is "anyone's guess", Scantlebury says easing inflation is on the side of the developers as well.
M&A is also expected to continue.
"I think the amount of cash that some of these these (miners) are putting on (means M&A will continue)," Scantlebury said.
"Ramelius was adding $256 million bucks in a single quarter in underlying free cash flow.
"When you're doing quarters like that, you can go and buy some of these juniors with one quarter of free cash flow and pick up a couple of these kind of small developers to, especially if you've got infrastructure already in place."
Among the potential takeover targets in the developer space, Scantlebury says Magnetic Resources (ASX:MAU) could be a target for Laverton gold district neighbour Genesis Minerals (ASX:GMD).
He also thinks Ramelius Resources (ASX:RMS), currently executing a merger with Spartan Resources (ASX:SPR), could look to mop up projects around its pre-development Rebecca/Roe site.
Meanwhile, Scantlebury says Antipa Minerals (ASX:AZY) is a "screaming takeover target" for Greatland Gold, Scantlebury says.
Its 2.8Moz Minyari Dome project sits in the neighbourhood of Greatland's Telfer plant, acquired for US$475m from Newmont last year and expected to be underfed when its primary ore feed switches to the underground Havieron deposit.