Key Highlights

  • Red Hill has entered a heads of agreement with Legacy Minerals to extinguish the buy-back right over its 1.5% royalty.
  • Red Hill will fund a $2 million exploration program over 12 months, including at least 1,500 metres of diamond drilling.
  • Red Hill can then earn a 75% interest in the Thomson Project by spending a further $4 million over 48 months.
  • The 5,407 km² Thomson Project is prospective for intrusion-related gold-copper, with untested magnetic targets.

Red Hill Minerals Limited (ASX:RHI) has entered a heads of agreement with Legacy Minerals Holdings Ltd (ASX:LGM), the owner of the Thomson Intrusion Related Gold and Copper Project tenements in New South Wales. The update dated 11 November 2026 covers an arrangement under which Red Hill extinguishes a buy-back right over its Royalty and gains the option to earn a 75% interest in the wider project.

The royalty and the buy-back right

Red Hill holds a 1.5% net smelter royalty over most of the Thomson Project tenements. Red Hill acquired the royalty in 2025 for a cash consideration of $220,000. Legacy Minerals holds a right to buy back half the royalty for $2 million and the remaining half for a further $4 million.

Under the agreement, Red Hill can extinguish that buy-back right by spending $2 million on exploration on the royalty tenements over 12 months, which may be extended. The buy-back right ends on completion of that initial program, leaving Red Hill with the uncapped royalty over the royalty tenements.

The farm-in and the joint venture

Once the buy-back right is extinguished, Red Hill may elect to earn a 75% interest in all three Thomson Project tenements, including EL9728, which is not currently a royalty tenement, by spending a further $4 million over 48 months. If it earns that interest, a joint venture would be formed with Red Hill at 75% and Legacy Minerals at 25%, with Red Hill as manager.

Red Hill can also withdraw at the end of the first stage or after the joint venture is formed, in which case it keeps the royalty with the buy-back right extinguished. The royalty would then apply to all production from the three tenements. The agreement sets a minimum commitment of $2 million before Red Hill can withdraw.

The exploration target and the conditions

The Thomson Project covers 5,407 km² and is prospective for intrusion-related gold-copper mineralisation. The company identified several magnetic targets that are drill permit ready and have not been tested. The first program would include at least 1,500 metres of diamond drilling across at least two targets, allowing Red Hill to assess results before committing further expenditure.

Stage 1 is subject to Red Hill completing Due Diligence and to Legacy Minerals obtaining any required access agreements. Stage 2 is subject to similar conditions. Exploration of an underexplored province is inherently uncertain, and the outcome of the drilling will determine whether Red Hill proceeds to the second stage.

Final Word

The agreement gives Red Hill a larger exploration position and a route to a 75% interest, with a fixed first-stage commitment and an option to withdraw. Whether the drilling justifies the further $4 million spend will depend on the results from the first 1,500 metres and the two targets, and the royalty will remain valuable whichever path Red Hill takes.