09 May 2025
The Australian - Gold price surge brings ASX developers to prominence
By Kristie Batten
- Gold is trading at over $5200/oz
- That's brought developers back to prominence on the ASX, with Covid-era inflationary pressures also easing
- Medallion, Astral and Antipa among next generation of gold producers
The Western Australian gold space has largely been starved of developers over the past few years as a hangover from the tough pandemic years.
Two years of border closures in WA from 2020 to early 2022 spelled disaster for projects under execution, particularly in the gold sector, and ruled out any new developments.
Three years on normalising conditions, waning inflation and a record high gold price – over $5200/oz yesterday – mean gold developers are flourishing once again.
Last month, Northern Star Resources (ASX:NST) reported that the state’s largest gold development, the $1.5 billion mill expansion at the KCGM operation in Kalgoorlie, was on track.
In mid-2022, Evolution Mining (ASX:EVN) was forced to defer an expansion of its Mungari plant, outside Kalgoorlie, due to high costs and labour shortages.
It pushed the button on the $250 million project in early 2023.
In further evidence of improving conditions for project development, earlier this year, Evolution revealed the project was nine months ahead of schedule and 6% under budget.
Black Cat Syndicate (ASX:BC8) and Brightstar Resources (ASX:BTR) have recently successfully transitioned to production, while Meeka Metals (ASX:MEK) looks to be weeks away from first gold.
In recent weeks, the next crop of developers appear to have been accelerating plans with significant upside on offer due to the surging gold price.
Medallion Metals (ASX:MM8)
Medallion has been moving in leaps and bounds on the path to developing its 1.5 million ounce Ravensthorpe gold-copper project.
Earlier this week, Medallion and IGO amended the terms of a deal which would see Medallion acquire IGO’s Cosmic Boy plant and equipment for a net smelter return royalty of up to 1.5% on all future gold production from the Forrestania tenements.
A December 2024 scoping study for Ravensthorpe outlined capital costs of $73 million for an operation to produce 336,000oz of gold and 13,000t of copper at all-in sustaining costs of $1845 per ounce over 5.5 years.
Using a gold price of $4000/oz and a copper price of $6.15 per pound, the study returned a pre-tax net present value of $429 million, an internal rate of return of 169% and a payback period of nine months.
Medallion has already received interest from potential offtake partners to provide project financing of up to $50 million.
Medallion is aiming to make a final investment decision on Ravensthorpe by the end of this year.
Astral Resources (ASX:AAR)
Earlier this week, Astral completed the acquisition of Maximus Resources, smoothing the path to production at its Mandilla gold project outside Kalgoorlie.
The deal boosted Astral’s resource by 139,000oz to 1.76Moz and expanded the company’s tenure, giving it more control over future development plans.
Astral is preparing to release a prefeasibility study for Mandilla in the coming weeks.
A 2023 scoping study outlined a A$123 million, 2.5Mtpa open pit operation to produce 845,000oz of gold over 10.4 years at AISC of $1643/oz.
Using a gold price of $3000/oz, the project had an NPV of $579 million, an IRR of 92% and a payback period of less than six months.
Astral managing director Marc Ducler recently said the project would generate “rivers of cash” at a $5000/oz gold price.
Unlike the scoping study, the PFS will also include the 196,000oz Feysville project up the road from Mandilla.
The company confirmed this week that the plant and infrastructure capital costs had been received and were under review, while operating costs are tracking in line with the 2023 study.
Rox Resources (ASX:RXL)
On Monday, Rox announced it had raised $40 million to fund the definitive feasibility study and early works for its Youanmi gold project near Mt Magnet.
The 2024 PFS confirmed the viability of a 100,000ozpa project over 7.7 years.
Pre-production capital costs were forecast at $245 million with AISC of $1676/oz expected.
The financials: At a $3700/oz gold price, life-of-mine free cashflow would be $1.3 billion, with a post-tax NPV of $541 million and IRR of 49%. Remember, there are gold prices now to plug in.
A DFS is due to be completed by the end of the year.
The funds raised this week will allow the company to start development of the United North and Pollard declines, rehabilitate the Youanmi Main portal and decline, complete additional dewatering, begin early infrastructure works and start the process plant detailed design and engineering.
The company is also planning two resource updates this year, in mid-year and in December with the release of the DFS.
Rox is aiming to start full-scale development in the March quarter of 2026, with first gold targeted for the first quarter of 2027.
Antipa Minerals (ASX:AZY)
Last month, Antipa reconsolidated its 100%-owned Minyari Dome, Wilki and Paterson projects, to form the single, belt-scale Minyari project in the Paterson Province, following the withdrawal of Newmont and IGO from the Wilki and Paterson farm-ins.
Antipa released a scoping study for Minyari Dome in October 2024, outlining a $306 million, 130,000ozpa operation over 10 years at AISC of $1721/oz.
Based on a $3000/oz gold price, the project delivered a post-tax NPV of $598 million and IRR of 46%.
A PFS on the 2.3Moz project is underway, which will include a 13,000m drilling program at Minyari Dome, aimed at expanding the resource, and a 20,400m discovery program on the broader project.
Permitting, metallurgical testwork and environmental studies are also underway.
Antipa is well-funded for the work, with $40 million cash at the end of March, and has already kicked off early discussions with potential project financiers.
While the company is focused on a standalone development, it is also considered a candidate for possible corporate action given Minyari Dome is just 35km from Greatland Gold’s Telfer gold mine.
Saturn Metals (ASX:STN)
Saturn is developing the Apollo Hill gold project near Leonora, which has a resource of 118.7Mt at 0.53g/t gold for 2.03Moz of gold.
A 2023 preliminary economic assessment envisaged a 10Mtpa open pit, heap leach operation, costing $304 million to produce 122,000ozpa over 10 years at AISC of $1857/oz.
Using a very conservative gold price of $2665/oz, life-of-mine EBITDA would be just over $1 billion and pre-tax, undiscounted free cashflow would be $688 million.
The study returned an NPV of $388 million, internal rate of return of 30% and payback period of 2.8 years.
At the current gold price, the payback period is expected to be less than a year.
A 60,000m drilling program is underway with the next resource update expected to be released in July, which will feed into the PFS and initial reserve estimate.
The company expects to undertake a DFS next year and move into construction in 2027, with first gold targeted for 2028.
In April, Saturn raised $25 million in a placement supported by major shareholders, Canada’s Dundee Corporation and Hedley Widdup’s Lion Selection Group (ASX:LSX).
Ausgold (ASX:AUC)
Ausgold is due to complete a feasibility study on its Katanning gold project before the end of next month.
The project has a resource of 88.9Mt at 1.06g/t gold for 3.04Moz of gold and a reserve of 32Mt at 1.25g/t gold for 1.28Moz of gold.
The study is focused on an initial 3.6Mtpa operation followed by an expansion to ~5Mtpa.
A 2023 scoping study into a 5Mtpa option forecast capital costs of $297 million for a 10-year mine life at a production rate of 136,000ozpa at AISC of $1549/oz.
Using a $2750/oz gold price, the project was forecast to generate life-of-mine revenue of $3.64 billion, EBITDA of $1.63 billion and post-tax free cashflow of $770 million.
The study returned a post-tax NPV of $541 million, an IRR of 46% and a payback period of 20 months for the proposed open pit operation.
Ausgold is fully funded through to the final investment decision, which is expected in the first quarter of 2026.
Minerals 260 (ASX:MI6)
A newcomer after recently acquiring the Bullabulling project in Coolgardie is Tim Goyder-chaired Minerals 260.
Bullabulling produced 179,000oz of gold in the late 1990s, after being developed by Resolute Mining, but closed down due to low gold prices at the time.
The advanced project sat dormant inside Chinese giant Zijin Mining for the past decade.
The $166.5 million acquisition included an exploration camp and offices, and access to power, water and the Great Eastern Highway, meaning Minerals 260 can potentially fast-track it into production.
Minerals 260 has $50 million cash and has already kicked off an aggressive 80,000m drilling program, which will be completed in the next six months.
The program is aiming to increase the 2.3Moz resource and increase its confidence level, and feed into economic studies.
Argonaut head of research Hayden Bairstow is already forecasting a 5Mtpa open pit operation to produce around 140,000ozpa.
At Stockhead, we tell it like it is. While Astral Resources, Medallion Metals and Antipa Minerals are Stockhead advertisers, they did not sponsor this article.
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