Lunnon Metals (ASX:LM8) accelerates Lady Herial toward final approval following robust resource upgrade

Lunnon Metals has taken another major step toward realising the near term development potential of the Lady Herial gold deposit, delivering an updated Mineral Resource that reflects close spaced drilling, and improved classification confidence.

The company has accelerated Lady Herial from first drilling in early 2024 to a technically advanced asset that is now positioned for a streamlined transition into production once approvals are finalised.

The significance of this progress was captured by Managing Director Edmund Ainscough, who highlighted the impact of sustained technical momentum:

“The June 2025 Lady Herial Scoping Study detailed the potential positive economic impact that Lady Herial might offer.”

This statement underscores the role of consistent study work and targeted drilling in shaping the updated model, which has now been accepted by Gold Fields for mine design purposes under the Ore Purchase Agreement.

To provide further clarity for investors, the company has addressed the most common questions arising from the updated resource release.

How does the updated Mineral Resource improve confidence in the Lady Herial deposit and its economic potential?

The updated Mineral Resource increases confidence significantly because it incorporates over nine kilometres of new drilling since the May 2025 initial Mineral resource.

This drilling has been across the Upper, Middle, Lower and Northwest structures, much of it drilled at very tight spacing that approaches grade control density.

This close spacing has enabled us to achieve much graeater deficntion of the higher grade and lower grade and to define any internal waste. The result is a Measured Resource 226,000 tonnes at 2.6 g/t Au for 19,200 ounces.

The larger proportion of Measured Resource reflects the strong confidence resulting from that close spaced drilling.

Gold Fields accepting the updated model further validates the technical robustness of the work and satisfies a major condition of the Ore Purchase Agreement, creating a reliable foundation for mine design and future scheduling.

What are the key steps remaining before mining can commence at Lady Herial?

The remaining steps relate primarily to final regulatory approvals rather than technical work, as the Mining Proposal, the Mine Closure Plan and the Native Vegetation Clearing Permit applications have already been submitted to the Western Australian Government.

Once the Mining Proposal and Mine Closure Plan are approved, the development footprint can be cleared and pre development work can commence, including establishing the Run of Mine pad, preparing the waste dump position and installing supporting surface infrastructure.

Some targeted infill drilling will also be completed inside the pit boundaries to refine categorisation of any remaining Indicated or Inferred Resource.

Although most of the deposit has already been drilled to a sufficient density there are always opportunities to define more ore that falls within the volume we are going to move anyway.

How does the Ore Purchase Agreement with Gold Fields influence the project economics?

The Ore Purchase Agreement provides certainty in processing and revenue because all material above 0.5g/t Auwill be sold to Gold Fields for treatment at the nearby Lefroy plant, just a short distance from Lady Herial.

Under the agreement, both companies recover their respective operating costs and Lunnon Metals also recovers its start up and pre development costs before free cash flow is shared, 70% to Lunnon Metals and 30% to Gold Fields.

The agreement locks in key operating cost rates for mining, haulage, processing and technical oversight which reduces risk and ensures financial clarity.

Gold content is calculated monthly using the agreed metallurgical recovery of 91% and the monthly average A$ dollar gold price.

This combination of proximity, cost certainty and clearly defined revenue treatment creates a commercially strong framework for the project.

What does the updated drilling reveal about further upside or extensions to the Lady Herial system?

The updated drilling confirms that both the Upper and Lower Structures remain open down plunge to the northwest within the favourable Defiance Dolerite host, although we are very confident to move forward with the current mine plan in the interest of time.

What the drilling did indicate is that the Northwest Prospect, which was discovered above the Upper Structure during sterilisation drilling for infrastructure planning, presents as a real opportunity for growth.

It remains open in all directions and, although not required in the initial pit design, offers meaningful potential for a push back or underground evaluation once the open pit is completed.

A Year of Rapid Progress

As the technical work has reached successive milestones throughout the year, Edmund Ainscough, noted the rate of progress and the importance of internal and external validation:

“Each subsequent milestone propels the Company closer to enjoying the benefits of having advanced the deposit so swiftly from first drill hole to now being on the verge of production.”

He also highlighted the impact of the role of the Gold Fields technical team and their assessment of Lunnon’s work:

“Endorsement by the Gold Fields internal technical team is further validation of the approach and methodology taken by our own geology staff.”

Looking to the immediate future, he noted:

“Regulatory approval is pending but all other preparations are well in hand, whilst the Australian dollar gold price still sits comfortably at levels we could only have dreamed about this time last year.”

Advancing toward construction ready status

The updated Lady Herial Mineral Resource positions Lunnon Metals strongly as the project continues to progress through regulatory and commercial steps toward a final development decision.

With extensive close spaced drilling, an updated model now accepted for mine design under the Ore Purchase Agreement, high metallurgical recoveries, clearly defined cost structures and well advanced approvals, the company has built a robust foundation for the next stage of growth.

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