Lefroy Exploration (ASX:LEX) advances Lucky Strike toward production as Burns growth strategy accelerates

Following the release of its September 2025 Quarterly Activities Report, Lefroy Exploration Limited Chief Executive Officer Graeme Gribbin shared insights into the company’s operational progress, including major milestones at the Lucky Strike Gold Deposit, the strengthening of its profit-sharing partnership with BML Ventures, and the exploration growth underway at the Burns Central Deposit.

The discussion highlighted how these developments collectively position Lefroy to transition from exploration toward near-term production while maintaining disciplined financial management and shareholder-focused growth.

What progress has been made at the Lucky Strike Gold Deposit and how do the recent drill results support its development potential?

During the September quarter, Lefroy completed the final stage of the grade control drilling program at Lucky Strike, which represents a major milestone under our profit-sharing agreement with BML Ventures.

The program consisted of 421 reverse circulation holes totalling 16,476 metres, fully funded by BML.

These results have reinforced the robustness of our geological and resource model while significantly strengthening confidence in the continuity of mineralisation across the deposit.

Several outstanding shallow, high-grade intercepts were reported, including 9 metres at 9.8 grams per tonne gold from 25 metres, 2 metres at 64.37 grams per tonne gold from 37 metres, and 8 metres at 8.14 grams per tonne gold from 23 metres.

These outcomes confirm the strength of near-surface mineralisation and support the potential for efficient, low-cost mining.

Additionally, deeper Stage 2 drilling returned exceptional intersections such as 24 metres at 5.24 grams per tonne gold from 134 metres and 9 metres at 8.59 grams per tonne gold from 155 metres, further extending mineralisation below the current Stage 1 pit.

“These assays have validated, and in some cases exceeded, expectations from the existing Mineral Resource Estimate of 1.27 million tonnes at 1.95 grams per tonne gold for 79,600 ounces.”

Taken together, both stages of drilling confirm the opportunity for a larger pit design and underline the broader potential of the Lucky Strike mineral system along strike and down plunge.

Can you explain how the profit-sharing agreement with BML Ventures benefits Lefroy shareholders?

The profit-sharing agreement with BML Ventures is central to our near-term growth strategy because it allows Lefroy to realise value from Lucky Strike while limiting capital exposure.

Under the agreement, profits are shared equally on a 50:50 basis, with BML acting as the statutory mine operator responsible for all mining approvals, capital and operating costs, and site management.

This arrangement provides clear benefits for shareholders, as it enables Lefroy to retain exposure to production and profits without the financial burden of mine development, allowing capital to be preserved for advancing our other key assets, including Burns and Mt Martin.

During the quarter, we received the first $1.25 million instalment under the $2.5 million Profit Cash Advance Facility Agreement with BML, which strengthened our cash position ahead of the expected profit-share distributions in the first half of 2026.

The facility provides for a further $1.25 million in advances over the December, March and June FY26 quarters, carries no upfront fees, and is secured only against the Lucky Strike tenement.

It includes a modest 8 percent coupon rate per annum, which represents a low-risk funding model for Lefroy as we move toward production.

“It is a low-risk, high-leverage model that provides a funding bridge between exploration and production, enabling Lefroy to advance multiple projects in parallel.”

This structure not only enhances liquidity but also allows the company to maintain operational flexibility across its exploration portfolio.

What are the next steps for progressing the Lucky Strike project toward production?

Our immediate focus has shifted from exploration to early-stage development. During the quarter, several key permitting milestones were achieved, including the completion of a heritage survey undertaken in collaboration with the Kakarra (Part A) Native Title Holders.

The survey, which covered the main mining lease M25/366 and associated infrastructure tenements, confirmed that there were no cultural heritage values likely to impede the proposed works program.

At the same time, two clearing permit applications, CPS 11114/1 and CPS 11222/1, were lodged and are progressing through the government assessment process.

The primary permit, CPS 11114/1, which covers mineral production and associated activities, is expected to reach final assessment and approval in the December quarter.

“With these approvals progressing well, we remain on track to begin first earthworks and pre-strip activities in November.”

These steps are expected to establish the foundation for mining operations, including haulage and access corridor development. In parallel, we are advancing designs for a potential

expanded Stage 2 pit based on recently collected geotechnical and assay data, which will help determine the optimal pit configuration and future growth potential at Lucky Strike.

How is Lefroy using its strengthened cash position to advance exploration across other key assets like the Burns Project?

The cash advance from BML has provided the flexibility needed to accelerate exploration across our broader gold portfolio, particularly at the Burns Central Deposit, located within the Lefroy Gold Project about 70 kilometres southeast of Kalgoorlie.

The Burns Gold Deposit contains a mineral resource estimate of 42.96 Mt @ 0.36 g/t Au for 497,472 ounces (Indicated 32.31 Mt @ 0.38 g/t Au for 394,308 oz. Inferred 10.65 Mt @ 0.30 g/t Au for 103,165 oz).

Contained within this resource is a high-grade zone of 4.22 million tonnes at 1.18 grams per tonne gold for 159,285 ounces, reported across oxide, transitional and fresh material within 200 metres of surface.

The deposit features a high-grade, structurally controlled gold zone that remains open along strike to both the north and south.

A targeted drilling campaign is scheduled to commence in November, focusing on shallow extensions of this mineralisation.

A shallow HQ diamond hole will also be completed to collect samples for additional metallurgical test work, following the strong 2023 results which confirmed gravity recoverable gold averaging 41 percent and total leach recoveries of approximately 97 percent.

This upcoming program is designed to extend the resource envelope, refine the geological model, and provide data to inform development pathways at Burns.

Together, these efforts complement the advancement of Lucky Strike, reinforcing Lefroy’s balanced approach of combining near-term mining development with ongoing exploration growth.

What is the broader growth outlook for Lefroy Exploration going into the December 2025 quarter and beyond?

Lefroy Exploration enters the December quarter in a strong operational and financial position. With the first cash advance received, development approvals advancing, and site preparation imminent, our focus is on establishing the groundwork required for production readiness at Lucky Strike.

This includes developing infrastructure and ensuring all regulatory conditions are satisfied as we transition the project into its next phase.

At the same time, we are pressing ahead with the Burns resource extension program and assessing early to advanced-stage gold targets across our 635 square kilometre contiguous tenement package in the Kalgoorlie–Kambalda district.

This integrated exploration and development approach is central to building a sustainable, multi-asset gold business in one of Western Australia’s most proven mining regions.

“Our focus through the remainder of 2025 is to transition Lucky Strike toward development, advance the Burns exploration program, and position Lefroy for a productive 2026, where both operational delivery and exploration success are expected to drive shareholder value.”

As of 30 September 2025, the company held cash reserves of $2.01 million.

With quarterly operating outgoings of $236,000 and exploration investment of $684,000, Lefroy continues to manage expenditure prudently while maintaining strong momentum across its portfolio.

A confident path to growth

Lefroy is entering an exciting new phase as it moves closer to production at Lucky Strike while continuing to unlock exploration upside across its broader portfolio.

The combination of consistent high-grade results, disciplined financial management, and a well-structured partnership with BML Ventures gives the company both strength and flexibility as it builds a foundation for sustained growth.

With critical approvals advancing, development activities commencing, and exploration expanding at Burns, Lefroy is well positioned to enter 2026 with momentum, balance and a clear focus on delivering value to shareholders.

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