Lunnon Metals (ASX:LM8) unveils new gold structure at Lady Herial Northwest, reinforcing growth outlook

Lunnon Metals Limited (ASX:LM8) has confirmed the discovery of a new stacked gold bearing structure at its Kambalda Gold and Nickel Project (KGNP) in Western Australia.

The results, released on 29 July 2025, further bolster the company’s understanding of the Lady Herial deposit and support its broader strategy across the underexplored Foster Gold Belt.

In this Q&A, Managing Director Edmund Ainscough answers five key questions on what the latest drilling results mean for the project’s development pathway, the company’s financial outlook, and what investors can expect moving forward.

What is the significance of the new gold intercepts at Lady Herial Northwest?

Recent reverse circulation drilling to the northwest of the current Lady Herial open pit footprint has intersected a previously unrecognised zone of robust mineralisation.

The program returned standout results including 15 metres at 2.19 grams per tonne gold, 12 metres at 2.19 grams per tonne, and 14 metres at 1.10 grams per tonne.

One drill hole, LDH25RC_118, intersected both the newly named Lady Herial Northwest structure and a separate zone within the Lady Herial Upper Structure approximately 60 metres downhole.

The nature and geometry of these intercepts point to a system that is laterally and vertically more extensive than previously interpreted.

“These stacked intercepts confirm that the gold system is both broader and more complex than previously understood. Furthermore, they mirror the broad, flat-lying style of mineralisation that we’ve already seen at Lady Herial and elsewhere in the Foster Gold Belt, reinforcing our view that the belt is underexplored and remains highly prospective.”

This discovery strengthens the company’s geological model and demonstrates the potential for further repetitions of Lady Herial style systems across its tenement holding.

Will the discovery of Lady Herial Northwest change your current development plans for the Lady Herial open pit?

The new zone does not require any change to the existing open pit design.

Although the mineralisation at Lady Herial Northwest is both thick and high grade, it sits at a depth and position that is unlikely to materially impact the current proposed pit shell.

The company intends to continue advancing permitting activities without delay, with submissions for the Mining Proposal, Mine Closure Plan and Native Vegetation Clearing Permit well underway.

“Based on our interpretation of the geology and the vertical separation between this new zone and the Upper Structure, we have determined that the LDH Northwest mineralisation does not materially impact the pit shell or development footprint at this time.”

However, the company has identified the potential to access this zone from the northwest pit wall once mining of the current mine design is complete, presenting an opportunity for future underground development that would benefit from reduced capital intensity and early geological control.

How do these results position Lunnon Metals financially, given the current gold price environment?

Lady Herial is shaping up to be a robust near-term development opportunity, underpinned by a Mineral Resource of 0.57 million tonnes at 1.6 grams per tonne gold for 29,000 ounces.

A Scoping Study released on 16 June 2025 outlined the potential for a low-strip ratio open pit to extract between 300,000 and 320,000 tonnes of ore at an average grade of 1.8 grams per tonne. It is important to emphasise that all the material assumptions in that Scoping Study and underpinning the forecast production and forecast financial information derived from that production, continue to apply and have not materially changed.

“At the time of the Scoping Study, we modelled a scenario using a gold price of A$5,000 per ounce, which indicated that the open pit could generate approximately A$45 million in free cash flow on a 100 per cent basis.”

These economics are especially attractive due to the project’s shallow depth, existing infrastructure access, and minimal capital requirements.

The new intercepts from LDH Northwest provide additional optionality for mine life extension or underground development.

What is the current status of your discussions with Gold Fields Ltd, and how does this affect project progression?

Lunnon Metals is progressing discussions with Gold Fields, the company’s major shareholder and the operator of the nearby Lefroy processing facility.

The talks are centred around a potential ore sale or ore purchase agreement that would enable fast-tracked processing of Lady Herial ore.

The proximity of the Lefroy plant, just a few kilometres from Lady Herial provides a valuable infrastructure solution.

Should the agreement require shareholder approval, the company will prepare to hold an Extraordinary General Meeting following an update to the market.

This potential partnership supports Lunnon’s transition from explorer to producer by reducing development lead times and providing an efficient processing route.

What makes the Lady Herial discovery and the Foster-Baker area so prospective compared to other gold projects in the region?

The broader Foster-Baker area lies within the renowned Kambalda–St Ives gold camp, a region that has produced over 16 million ounces of gold to date.

Hosted in the Defiance Dolerite, a known favourable unit for gold mineralisation, the Lady Herial system and its stacked geometry reflect classic traits of other major deposits in the district.

What makes any discovery on our tenure at St Ives particularly exciting is the extent of underexplored ground across the company’s tenement package.

“The area’s mining history, supportive geology and growing body of high-grade drill results all combine to make Foster-Baker a very exciting proposition.”

With multiple targets identified and further drilling planned, Lunnon Metals is confident in its ability to generate new gold discoveries within a known world-class mining belt.

Strategic progress with clear near-term catalysts

The confirmation of a new gold structure at Lady Herial Northwest supports Lunnon Metals strategy of unlocking value within the Foster Gold Belt through systematic exploration and disciplined project development.

While the focus remains firmly on delivering the open pit at Lady Herial, the company also has programs on foot aiming to discover more significant gold deposits, for example, at the West Australian EIS sponsored drilling at Defiance West.

With permitting advancing, discussions ongoing with Gold Fields, and drilling success continuing, Lunnon Metals is well placed to enter its next phase of value creation.

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