Key Highlights

  • Cash balance grew to $43.0 million at 30 September 2026, up from $22.2 million at 30 June 2026, following successful completion of Lady Herial mining
  • September quarter deliveries from Lady Herial totalled 96,556 tonnes at 1.88g/t gold for 5,821 ounces
  • Hustler Mineral Resource updated to 36,200 ounces gold, a 20% increase, with permitting work continuing
  • $13 million FY2027 exploration program commenced, with 9.9km drilled during the quarter across Benmore, Plentiful, Koombana and Hustler targets

Lady Herial Delivered and Delivered Well

Lunnon Metals (ASX:LM8) closed out its Lady Herial open pit Mining operation in early August 2026, ahead of schedule, with a reconciliation outcome that validated the underlying technical work. Total open pit production reached 303,437 tonnes at 1.68g/t gold, yielding 14,910 ounces of gold sold at 91% metallurgical recovery. The reconciliation against the January 2026 Feasibility Study showed 13% more tonnes than forecast — due to occasional dilution and minor additional ore blocks — with grade 11% lower as a result. The net effect was slightly more gold than modelled, at 100.7% of the ore reserve estimate, with revenue, gold content, Australian-dollar gold price and unit cost per ounce all closely aligned to plan.

Managing Director Edmund Ainscough characterised the cash build generated by the company's 70% share of free Cash Flow from Lady Herial as "impressive and acts as a significant enabler." The cash balance grew from $22.2 million at 30 June 2026 to $43.0 million at 30 September 2026, supported by $35.1 million in Revenue receipts during the quarter against approximately $7.6 million in direct operating costs.

Exploration Program Kicks Off in Earnest

With Lady Herial concluded and the cash balance rebuilt, the company has shifted emphasis to its $13 million FY2027 exploration program across the broader Forrestania-Benmore-Attenborough (FBA) tenement package — a tenure position at the heart of the St Ives gold camp in Western Australia. This is the exploration program that management and many investors regard as the key to unlocking the next phase of value creation.

During the quarter, 9.9 kilometres of drilling were completed across four targets: Benmore, Plentiful, Koombana and Hustler. The annual target is 43 kilometres or more for the full year. The early Benmore result drew particular commentary from management — described as "particularly encouraging in regard the alteration, mineralisation and structure that all closely correlated with typical St Ives style gold deposits." That correlation is material because St Ives-style deposits can be very large.

Hustler Resource Grows 20%

At Hustler, an updated Mineral Resource Estimate was reported during the quarter, increasing the estimate by 20% to 36,200 ounces of gold. Permitting work for the potential development of Hustler as the next mining operation is continuing, alongside assessment of a possible cutback at Lady Herial. Ainscough noted that progress on both has been "slightly longer than expected due to the need to wait for operations to cease to drill out key areas in that northwest quadrant" of the Lady Herial Mineral Resource — a temporary constraint that will resolve as the post-mining drilling program proceeds.

Nickel Assets in the Background

Lunnon Metals holds high-grade nickel sulphide assets in the Kambalda region that remain a potential source of future value, though current nickel market conditions have kept these on the back burner. During the quarter, the company acknowledged BHP's announced sale of the Kambalda Nickel Concentrator to Gold Fields Ltd — a transaction that involves Lunnon's largest Shareholder — and noted that the company intends to investigate potential opportunities arising from the proposed change in concentrator ownership. The concentrator is essential infrastructure for any future Kambalda nickel production, making its ownership directly relevant to Lunnon's optionality in the nickel space.

Risks

The exploration program at FBA, while well-funded, carries inherent geological risk. Early-stage results at Benmore and other targets are encouraging but represent a very small proportion of the total planned drilling. Resource conversion at Hustler and the Lady Herial cutback will depend on drill results from areas that could not be accessed during active mining. Nickel market conditions remain depressed, limiting the near-term upside from that portion of the asset base. Royalty payments to the Ngadju Native Title Aboriginal Corporation, while a feature of the company's stakeholder model, represent an ongoing cost of operations.

What to Watch Next

Drilling results from the expanded FY2027 exploration program — particularly at Benmore, where early geological correlations have been encouraging — will be the primary catalyst for market attention. A development decision on Hustler, or confirmation of a Lady Herial cutback program, would establish the next production source. Any update on the Kambalda Nickel Concentrator transaction and its implications for Lunnon's nickel assets will also be monitored.

Sector Context

The St Ives gold camp in Western Australia is one of the country's premier gold producing regions, with Gold Fields' St Ives operation having produced tens of millions of ounces historically from the same structural corridor that hosts Lunnon's tenements. Exploration in mature camp settings benefits from extensive historical geological knowledge and well-developed infrastructure, but also requires modern techniques and systematic programs to find the remaining endowment.