Lunnon Metals (ASX:LM8) confirms down plunge high grade continuity at Lady Herial, strengthening case for open pit expansion.

Lunnon Metals Managing Director Edmund Ainscough discussed the technical and strategic implications of recent down plunge reverse circulation drilling at the Lady Herial gold deposit, where close spaced drilling beneath and to the northwest of the current open pit design has confirmed the continuity, thickness and persistence of high grade gold mineralisation on the Upper Structure and the overlying Northwest Prospect.

The discussion focuses on how these results refine the geological model, strengthen confidence in down plunge extensions and inform the evaluation of staged development options within the existing regulatory framework at the Kambalda Gold and Nickel Project in the St Ives gold camp.

How do the recent down plunge reverse circulation drilling results at Lady Herial alter the understanding of grade continuity and thickness beyond the current open pit design, particularly on the Upper Structure and the Northwest Prospect?

The down plunge reverse circulation drilling, completed on approximately 8 m by 6 m spacing beneath, and to the northwest of, the current planned pit shell, has materially increased geological confidence in both grade continuity and true width on the Upper Structure and the Northwest Prospect, while also confirming that the mineralised system remains open in this direction and at depth.

“Thick, high grade gold mineralisation has now been demonstrated to persist down plunge beyond the current pit limits on both the Upper Structure and the Northwest Prospect, with close spaced drilling confirming continuity of width and grade.”

The program returned multiple significant intercepts, including 13 m at 9.41 g/t Au, 13 m at 4.88 g/t Au, 11 m at 3.81 g/t Au and 7 m at 7.73 g/t Au, all of which occur below or immediately outside the limits of the existing pit design and therefore fall outside the current mine plan.

These results form part a coherent continuation of previously gold minerlisation, with the density of drilling providing confirmation of the geometry and tenor of the gold present across multiple sections.

Given that commencement of open pit mining will remove access to the surface where we typically drill this down plunge position, the completion of this program prior to development materially strengthens the geological model and the confidence in the scale of mineralisation extending beyond the initial pit shell.

What is the significance of the Upper Structure and Northwest Prospect mineralisation in the context of potential future open pit extensions and strip ratio outcomes?

The Upper Structure and the Northwest Prospect form a stacked mineralised system that plunges to the northwest beneath the planned pit wall, and their relative positions suggests that both would be intersected by any logical cut back in that direction.

The thickness of mineralised intervals and the presence of gold on more than one structure within the same potential cut back have important implications for pit geometry and waste to ore ratios.

“The presence of stacked, thick gold lodes beneath the northwest wall has the potential to materially improve strip ratio outcomes in any future cut back scenario by increasing the proportion of mineralised material within the pit envelope.”

Sectional interpretation shows that mineralisation on both the Upper Structure and the Northwest Prospect extends beneath the current pit design, such that a northwest expansion would capture multiple lodes rather than relying on a single horizon.

How do the latest results influence the Company’s assessment of development optionality at Lady Herial in relation to regulatory approvals and mining sequence?

The down plunge extensions identified by the recent drilling are located largely within, or immediately adjacent to, the footprint covered by the approved Mining Proposal and Mine Closure Plan and the granted Native Vegetation Clearing Permit, under which open pit mining may commence at the Company’s election.

This positioning is strategically important when considering staged development scenarios.

“Mineralised extensions beneath the northwest pit wall lie largely within the existing permitted development envelope, offering the potential to expedite permitting having just completed the regulatory framework for the initial pit.”

The Company is close to completing a Feasibility Study level technical and financial analysis of the current pit based on detailed bench by bench mine design, mining contractor cost schedules and agreed haulage and processing terms under the Ore Purchase Agreement with St Ives Gold Mining Co.

Together, these work streams provide the foundation for then looking at sequencing a potential subsequent cut back once the current mine plan is executed.

What do the results imply for the Company’s strategy of using Lady Herial as a foundation for broader exploration and development across the Kambalda Gold and Nickel Project?

Lady Herial is the Company’s No.1 priority right now at the Kambalda Gold and Nickel Project. Confirmation of thick, high grade mineralisation beyond the current pit design strengthens its role, not only as a near term source of cash flow but also now over the medium term, as the deposit appears to offer a potentially larger mining inventory.

“The demonstrated down plunge continuity on multiple structures supports the potential for Lady Herial to evolve from an initial single stage pit into a multi stage operation capable of underpinning a longer term exploration and development commitment across the St Ives gold camp.”

Lunnon Metals has an Ore Purchase Agreement in place with St Ives Gold Mining Co for processing of ore from the planned open pit, and the June 2025 Scoping Study, applying a gold price of $5,000 per ounce, indicated pre-tax free cash flow of approximately $31.3 million on a 70% share basis, increasing to approximately $41.7 million when the same model is applied at $6,250 per ounce.

These outcomes, together with the current Feasibility Study level work, support a strategy in which initial production at Lady Herial provides the financial and operational platform for systematic and aggressive exploration across the Foster Baker project area, which sits within the broader St Ives gold camp, one that has produced more than 16 Moz of gold and remains one of Australia’s most endowed and prospective gold provinces.

Please note the following valuable information before using this website. 

Independent Research 

Market Open Australia is intended to be used only for educational and informative purposes, and any information on this website should not be taken as investment advice or guidance. It is important to conduct your own research before making any investment decisions, which should be based on your own investment needs and personal circumstances. Any investment decisions based on information contained on this website should be taken in line with independent financial advice from a qualified professional or should be independently researched and verified.