Highlights

  • Scorpion Minerals shares jumped 3.45% on 18 May 2026, following the release of latest funding update.
  • The company has secured a binding option agreement with Andel Resources linked to the Old Prospect tenements at the Pharos Gold Project.
  • The agreement includes a non-refundable AUD 2 million option fee payable within 21 Business days.
  • The proposed Right-to-Mine arrangement would see Andel fund Mining, haulage and processing activities.
  • Gold-bearing ore from Old Prospect is expected to be processed at the Kirkalocka Processing Plant located around 200km away.
  • Scorpion plans to commence mining studies, RC drilling, diamond drilling and regional exploration programmes in the near term.

Scorpion Minerals Limited (ASX:SCN) shares moved higher during the morning session on 18 May 2026 after the company announced a funding and development agreement aimed at advancing its Old Prospect gold deposit within the broader Pharos Gold Project in Western Australia.

The stock traded at AUD 0.030, up 3.45% for the day, and has gained 50% over the past 12 months as investors responded to the company’s latest development-focused update.

Scorpion announced that it had entered into a binding option agreement with Andel Resources Pty Ltd relating to the Old Prospect tenements, located within the Pharos Gold Project in the Murchison region northwest of Cue.

Under the arrangement, Andel will pay Scorpion an AUD 2 million option fee within 21 business days in exchange for an exclusive 12-month option to enter into a Right-to-Mine agreement covering the Old Prospect tenements.

The update marks a significant step in Scorpion’s strategy to transition the Old Prospect asset toward potential mining and processing activities while continuing exploration and resource expansion programmes across the broader project area.

According to the company, the agreement substantially improves funding visibility as it advances toward potential first production.

Agreement Linked to Existing Processing Infrastructure

A key aspect of the arrangement involves access to the Kirkalocka Processing Plant and associated infrastructure.

Andel Resources is a related party of Gylden Resources Pty Ltd, which owns the Kirkalocka Processing Plant and surrounding Kirkalocka Gold Project located approximately 70 kilometres south of Mount Magnet in Western Australia.

The processing plant sits roughly 200 kilometres from the Old Prospect tenements, with the majority of the transport route accessible via sealed roads.

Scorpion noted that the proposed Right-to-Mine structure would allow Andel to procure, manage and fund mining, haulage and processing activities associated with gold-bearing ore extracted from the tenements.

The agreement framework also includes proposed toll milling services through Gylden and mining services through SMS (WA) Holdings Pty Ltd, another related party of Andel.

Under the proposed structure, Andel would fund all mining-related activities at its own expense.

Following the payment of state royalties and reimbursement of project costs, remaining gold profits would be distributed between the parties.

According to the agreed terms, 40% of profits would be allocated to Scorpion, 40% to Andel, while the remaining 20% would be temporarily retained before later being split equally between both parties.

Option Fee Provides Additional Funding Support

The AUD 2 million option fee forms a central component of the transaction and is expected to provide Scorpion with additional funding flexibility as exploration and development activities accelerate.

The company stated that the fee is non-refundable except under limited circumstances involving breaches or failures associated with specific conditions precedent.

As part of the agreement, Scorpion will also issue 30 million unlisted Options to Andel or its nominees upon receipt of the option payment.

The options are split across three tranches:

  • 10 million options exercisable at AUD 0.05 expiring in six months
    • 10 million options exercisable at AUD 0.05 expiring in 12 months
    • 10 million options exercisable at AUD 0.05 expiring in 24 months

The allotment will be completed using the company’s existing Placement capacity under ASX Listing Rule 7.1.

The option arrangement remains subject to several conditions precedent, including legal and technical Due Diligence, granting of a mining Lease over the relevant project area and receipt of required approvals and consents.

Mining Studies and Drilling Programmes Planned

Alongside the funding announcement, Scorpion outlined an expanded exploration and development work programme across the Old Prospect area and surrounding Murchison tenure.

The company plans to commence updated open-pit optimisation work at Old Prospect in addition to mining studies and lodgement of a mining proposal.

Exploration activity will include infill and extension Reverse Circulation Drilling across the Old Prospect to Middle Bore trend.

Scorpion also plans to undertake targeted diamond drilling aimed at testing mineralisation down plunge at depth while collecting geotechnical and metallurgical samples.

Additional regional exploration work is expected to include around 1,500 metres of RC drilling across selected targets.

Detailed geological mapping, airborne magnetic surveys and lithostructural interpretation programmes are also planned as the company continues refining its understanding of mineralisation across the project area.

Chief Executive Officer Michael Fotios described the agreement as an important milestone for the company and said the arrangement provides a pathway to rapidly progress from exploration toward mining activities with the support of an established funding and infrastructure partner.

Old Prospect Resource and Regional Positioning

The Old Prospect deposit forms part of Scorpion’s broader Pharos Gold Project, which covers approximately 924 square kilometres of granted tenure within the Murchison Mineral Field of Western Australia.

The project lies near the northern extent of the Big Bell–Dalgaranga shear corridor, an area regarded as prospective for multiple mineralisation styles.

Scorpion currently holds a 100% interest in the project.

According to the company, the combined Old Prospect North and Old Prospect South mineralisation zones contain a JORC 2012 indicated and inferred mineral resource estimate of 312,395 tonnes grading 2.15 grams per tonne gold for 21,632 ounces of gold.

The Old Prospect North resource includes:

  • Indicated resource of 149,879 tonnes at 1.91 g/t gold for 9,214 ounces
    • Inferred resource of 62,637 tonnes at 2.46 g/t gold for 4,961 ounces

Old Prospect South includes:

  • Indicated resource of 79,429 tonnes at 2.50 g/t gold for 6,385 ounces
    • Inferred resource of 20,234 tonnes at 1.65 g/t gold for 1,075 ounces

Beyond gold, the broader Pharos Project is also prospective for copper, zinc, silver, lithium, nickel and platinum group elements.

The project additionally hosts the Mt Mulcahy copper deposit, where Scorpion has previously reported a JORC mineral resource estimate of 647,000 tonnes grading 2.4% copper, 1.8% zinc, 0.1% cobalt and 20g/t silver.

Pathway Toward Potential Production

The latest agreement appears aimed at reducing several of the funding and infrastructure challenges typically associated with junior gold development projects.

By linking Old Prospect to existing processing infrastructure and external mining services, the company may be able to accelerate development timelines while limiting upfront Capital requirements.

The proposed Right-to-Mine structure also allows Scorpion to retain exposure to future gold production outcomes through the agreed profit-sharing arrangement.

The company noted that the Kirkalocka Facility is expected to make available toll milling capacity for one campaign during calendar year 2027 and four campaigns during 2028 under the proposed arrangements.

The agreement term, if exercised, would extend for up to four years and nine months unless terminated earlier or extended through additional mine plans.

Investors Watching Development Milestones

Scorpion’s latest update places investor attention firmly on the progression of mining approvals, exploration results and execution of the proposed Right-to-Mine agreement over coming months.

Near-term focus areas are expected to include drilling outcomes, mining studies, metallurgical assessments and further resource definition work at Old Prospect.

The company’s ability to advance toward potential production while maintaining exploration upside across the broader Pharos Project may remain a key area of market interest.

With funding support now secured through the option arrangement and infrastructure access outlined through the Kirkalocka Partnership framework, shareholders are likely to monitor how quickly development milestones can be advanced.