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The Australian
an hour ago
- The Australian
MM8 on path to Ravensthorpe production
Medallion snags Forrestania Nickel Operation from IGO for 1.5% net smelter royalty on future gold production Deal preserves $29m war chest to progress work streams to facilitate Ravensthorpe development decision Resource upgrade and metallurgical work will feed into key feasibility study Special Report: Medallion Metals has executed an agreement to acquire IGO's Forrestania Nickel Operation, which will enable a fast-tracked pathway to gold and copper production from its Ravensthorpe project in WA. The agreement includes the existing Cosmic Boy processing plant and equipment, infrastructure, inventories and information including mineral rights other than nickel and lithium. This is a key plank in Medallion Metals' (ASX:MM8) plan to make a Ravensthorpe final investment decision in late 2025 that will transform it into WA's newest gold and copper producer. What makes the deal attractive is that there's no upfront or deferred cash consideration with the company granting IGO (ASX:IGO) a net smelter royalty of up to 1.5% on all future gold production from the tenements as consideration for the acquisition. It allows the company to preserve its circa $29m in cash reserves to progress multiple work streams such as testwork, feasibility studies and permitting activities to support the FID. IGO also retains the right to explore for, develop and mine nickel and lithium minerals over the tenements. 'The company now turns its focus to the development of a new gold and copper producer in Western Australia,' managing director Paul Bennett said. 'Bringing the established high-grade gold-copper resources at Ravensthorpe together with the Forrestania plant and infrastructure can unlock significant value in the short term, with a substantial option on future growth from the new discovery potential of the tenure at both Ravensthorpe and Forrestania. 'Study work is at an advanced stage, permitting is being progressed as a priority and discussions continue to advance positively with offtake and finance parties.' The acquisition is subject to several conditions including MM8 preparing and announcing a feasibility study, entering into a binding unconditional debt facility agreement and/or funding commitments, and reaching FID on the project. Ravensthorpe project The ~300km2 Ravensthorpe project is centred on the historical Kundip mining centre midway between the regional centres of Ravensthorpe and Hopetoun. It benefits from excellent infrastructure and is easily accessed by sealed roads with a sealed airstrip 10km to the south of the project. Resources currently stand at 19.2Mt grading 2.1g/t gold and 0.3% copper for contained resources of 1.3Moz gold and 56,000t copper. A scoping study completed in December 2024 estimated the project could produce 336,000oz of gold and 13,000t of copper from a production inventory of 2.7Mt grading 3.9g/t Au and 0.6% Cu, over a mine life of 5.5 years. This will generate pre-tax free cash flow of $498m using a base case assumed gold price of $3615/oz and copper price of $5.54/lb, which increases to $637m at a gold price of $4000/oz and copper price of $6.15/lb. The Forrestania Nickel Operations and Ravensthorpe gold project. Pic: Medallion Metals Given that gold prices currently stand at about US$3352/oz ($5177.44/oz) while copper is priced about US$4.40/lb ($6.80/lb), these figures can be considered to be fairly conservative. Forecast average all-in-sustaining cost is estimated at just $1845/oz of gold inclusive of net by-product credits while total pre-production capex is expected to be about $73m including mine establishment and process plant modifications. Pre-tax NPV and IRR is estimated at $329m and 129% respectively in the base case with payback expected within just 12 months Establishment of the proven, industry standard process route of gravity-flotation-CIL at Forrestania is expected to deliver high gold recovery of 98% and copper recovery of 80%. MM8 notes there's plenty of upside as the initial production inventory represents just 44% of existing sulphide resource (gold) with existing shallow drilling indicating the potential for further mineralisation at depth. There is also potential for commercialisation of its oxide and transitional resources (10.3Mt at 1.6g/t gold for 520,000oz of contained gold). Next steps The company is currently working with IGO to finalise ancillary agreements and progress towards transaction finalisation and closure. It expects to release an updated resource estimate in August that incorporates the results of the recently completed 17,000m drill program along with metallurgical recovery and metal deportment assumptions that will inform the feasibility study. MM8 has also materially progressed process engineering associated with planned modifications to the Cosmic Boy flotation plant. It will now begin placing orders for long lead time items inclusive of a secondary ball mill. Additionally, the company has submitted all additional information requested by the Department of Climate Change, Energy, the Environment and Water following its determination that the project will be assessed under preliminary documentation following its referral under the Environment Protection and Biodiversity Conservation Act 1999. Work has also started on submissions under the Environmental Protection Act 1986 while negotiations with potential offtake and finance parties are ongoing with MM8 expecting to mandate a preferred offtake and finance partner to work on an exclusive basis to establish binding concentrate offtake terms and finance terms. This article was developed in collaboration with Medallion Metals, a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
The Australian
an hour ago
- The Australian
OzAurum extends Cross Fault high-grade gold discovery across 400m
RC drilling at Cross Fault delivers gold intercepts across 400m strike Multiple zones identified, with mineralisation open at depth Follow-up drilling being planned with a resource in the works Special report : Results from ongoing RC drilling at OzAurum's Mulgabbie North project has confirmed multiple zones of gold mineralisation in fresh rock over a 400m strike, enhancing the scale at the emerging Cross Fault discovery. Around 17 holes for 1858m were carried out at the Cross Fault zone with high-grade intercepts now returned over a 400m strike. The aims of the program are to confirm earlier drilling results and test for gold mineralisation. Wide zones of pyrite and arsenopyrite mineralisation were observed in RC drill chips from multiple RC drill holes indicating gold potential at depth. Standout results include 10m at 2.18g/t gold from 85m, including 2m at 6.09g/t from 85m and 2m at 3.12g/t from 93m, as well as 21m at 1.22g/t from 33m, including 1m at 5.45g/t from 43m and 1m at 11.41g/t from 53m. An additional hole, MNORC 275, drilled at Golden Goose intersected 10m at 0.18 g/t Au from 15m and even though significant mineralisation wasn't intersected at depth, OzAurum (ASX:OZM) believes the target is prospective for further testing. Drilling for a resource now in the works OZM CEO and managing director Andrew Pumphrey said the RC drilling results from the Cross Fault discovery were highly encouraging, confirming the presence of significant high-grade gold mineralisation in fresh rock across a growing strike length. 'Importantly, the mineralisation style we're seeing – brittle sandstone-hosted with strong sulphide and quartz veining – is analogous to major deposits at Carosue Dam just 2km away,' he said. 'With mineralisation open at depth and along strike, we're now planning follow-up drilling aimed at delivering a maiden resource at Cross Fault. 'In parallel, we're excited to progress drilling at Heysen's Find, where high-grade rock chip samples have pointed to another promising gold target within our tenement.' Cross Fault building momentum OZM has been building momentum at the project since unveiling a high-grade gold hit of 20m at 3.57g/t from surface in February. That news triggered a fivefold share surge, re-rating the company from below $5m to its current ~$18m valuation. Gold prices at ~$5,000/oz in Australia are fuelling major tailwinds for OzAurum, strengthening its cash position, enabling exploration and drilling, and enhancing project value. This article was developed in collaboration OzAurum Resources, a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions. Sponsored Nova Minerals has released a conceptual processing flowsheet for its 1.24Moz RPM deposit in Alaska. Sponsored Rhythm Biosciences has announced that its second-generation ColoSTAT blood test detects colorectal cancer consistently across all stages of the disease.
The Australian
an hour ago
- The Australian
Fortescue's $92m Queensland hydrogen exit leaves $1bn pipeline stranded
Andrew Forrest sprinkled a little magic dust over the captivated Queensland Media Club audience in early 2022 when he described the promise of green hydrogen energy as better than any spell conjured-up in the pages of a Harry Potter book. Australia's richest businessman was then touting his plans for the world's largest electrolyser manufacturing plant and a green hydrogen production facility in Gladstone that was to neighbour the Palaszczuk government-led proposed $12.5bn Central Queensland Hydrogen Project (CQ-H2), which it hoped would become a global exporter of the energy. But three years later, both projects have been abandoned and the Queensland government is about to complete a $1bn water pipeline to Gladstone to service the CQ-H2 project. The pipeline, to be completed next year, now has no customer. It can also be revealed the Crisafulli LNP government has engaged lawyers to advise on 'remedies' for Mr Forrest's company, Fortescue, to repay what taxpayers spent in luring his project to the state. Sources have told The Australian that the incentive agreement struck between Fortescue and the former Labor government was estimated to be worth $92.5m. The state government spent more than $60m, according to the sources, on land and supporting infrastructure for the Fortescue project ahead of it being axed last month. Gladstone mayor Matt Burnett, who unsuccessfully contested the federal seat of Flynn for federal Labor in 2022, told The Australian on Monday there were serious questions on how infrastructure, particularly the $1bn Fitzroy-to-Gladstone water pipeline, and built for the proposed green hydrogen industry will now be used. Mr Burnett said the pipeline only went to the industrial precinct where the green hydrogen projects were to be located. 'The pipeline was to provide water to future energy and industry projects in Gladstone, and CQ-H2 was the main customer,'' he said. 'The pipeline doesn't connect to the dam, it's not for residential use. So now there is no major user for the water. 'How do they now intend to pay for the pipeline? That's a problem for this new government.'' Mr Forrest axed the hydrogen projects with an announcement last month it was pulling out of Gladstone. The manufacturing plant was built and had begun producing electrolysers but the green hydrogen facility was still a patch of dirt. Even before Fortescue closed its operations, the Liberal National Party government, which defeated Labor at the October state election, had effectively killed off the CQ-H2 project by refusing a funding request of $1.6bn in January. CQ-H2 was initially touted as being able to produce up to 200 tonnes of liquefied hydrogen a day by 2028, and four times that by 2031. State-owned power company Stanwell Corporation led the consortium and after its funding request was refused, it withdrew from the project. Two of the major Japanese consortium partners also quit CQ-H2, citing rising costs in the face of the unproven commercial viability of the energy. It was reported earlier this year that the 2019 initial $12.5bn estimated cost of the project's construction had blown out to $14.75bn by 2022, and there were further expected blowouts amid the worldwide hike in input costs. A Fortescue spokesman did not comment on details of the purported taxpayer-funded deal struck with the former Labor government to convince the company to locate its project in Gladstone. 'We are in discussions with the Queensland government and will return funds where required under the grant agreement,'' the spokesman said. It is understood the deal included up to $20m in payroll tax rebates over eight years. But a further $72.5m was offered to support the development of the land and enabling infrastructure – including power, wastewater and transport infrastructure – for the manufacturing facility and green hydrogen plant. It is understood the government is considering reimbursing the $4.5m paid by Fortescue for the state-owned land in which its facility was built. The government would not discuss the details of its plans. 'The Queensland government is working to recover taxpayer funds provided to support the project,'' said a spokesman for the Department of State Development. 'There is an active and ongoing effort already underway, and the department is working through terms to enable this outcome.' Already, the federal government has announced it will seek repayment of taxpayer assistance provided to Fortescue's projects in Gladstone under its Modern Manufacturing Initiative. Last month, a spokeswoman for Industry and Innovation Minister Tim Ayres flagged that the government believed it would be appropriate for Fortescue – a company worth almost $60bn – to refund the taxpayer assistance provided to it under the federal Modern Manufacturing Initiative. 'If Fortescue does not proceed … it would be reasonable for the government to seek reimbursement for where the grant agreement hasn't been fulfilled.' Read related topics: Andrew Forrest Politics Business leader Warwick Smith has warned Anthony Albanese to hasten slowly with any reforms agreed upon at the upcoming economic roundtable, amid warring unions and corporate groups. Politics The owners of some of Australia's biggest transport companies say Labor should drop its unrealised capital gains tax plan, with some considering liquidating part of their self-managed super funds.
