How Kuniko (ASX:KNI) Is Building a District-Scale Gold-Silver System at Commonwealth-Silica Hill

Sonal Goyal

03 November 2026 11:57 PM AEDT

How Kuniko (ASX:KNI) Is Building a District-Scale Gold-Silver System at Commonwealth-Silica Hill

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Key Highlights

Phase 2 diamond drilling of 1,492m across five holes completed at Silica Hill, extending the interpreted mineralised system by approximately 100m beyond the existing footprint and bringing the 2026 campaign total to 11 holes for 2,731m
Kuniko completed the first stage of its Commonwealth earn-in in early August 2026, securing 51% ownership and operational control — 12 months ahead of schedule — with a further $1.5M in exploration expenditure required to reach 70%
An updated Mineral Resource Estimate incorporating Phase 1 and Phase 2 results is targeted for December 2026, building on Phase 1's high-grade Silica Hill intercept of 84m at 2.6g/t AuEq from 226m including 0.5m at 347g/t AuEq
Integrated geophysical review has identified multiple high-priority regional targets within a 5km² prospective area, all less than 1km from the existing resource, with a regional drilling campaign planned for Q1 CY2027

Kuniko Limited (ASX:KNI) closed the September 2026 quarter having completed its Phase 2 diamond drilling program at the Commonwealth-Silica Hill Project in the Lachlan Fold Belt of New South Wales, secured majority ownership of the project ahead of schedule, and identified a pipeline of regional targets that could materially expand the mineralised footprint.

The Phase 2 program comprised five diamond holes for a total of 1,492 metres. Combined with Phase 1, Kuniko has now completed 11 diamond holes for approximately 2,731 metres across the two 2026 campaigns. The Phase 2 program was designed to test the interpreted Northern and Southern Lodes at Silica Hill, extending the system both laterally and at depth. Based on downhole observations, Phase 2 drilling has extended the interpreted Silica Hill mineralised system by approximately 100 metres beyond the existing mineralised footprint, with broad zones of disseminated sulphides and sulphide-bearing veining confirmed outside the current block model boundaries.

Assay results from the Phase 2 program are expected shortly and will be incorporated into an updated Mineral Resource Estimate targeted for December 2026.

Earn-In Milestone Achieved 12 Months Early

One of the most significant operational developments during the quarter was the completion of the first stage of Kuniko's earn-in at the Commonwealth Project. The company secured a 51% interest and operational control in early August 2026 — a milestone achieved 12 months ahead of schedule. Operational control provides Kuniko with the authority to direct exploration programs, engage contractors and make strategic decisions regarding the project without requiring partner approval at each step.

Kuniko retains the right to increase its interest to 70% through an additional $1.5 million in exploration expenditure. This milestone is expected to be achieved following the planned regional drilling campaign scheduled for Q1 CY2027. The accelerated pace of the earn-in reflects the company's commitment to advancing the project and demonstrates the confidence built through Phase 1 and Phase 2 results.

High-Grade Foundation: Phase 1 Sets the Benchmark

The Phase 2 program builds on a high-grade foundation established in Phase 1 drilling. The standout result from the earlier campaign — hole CMKNI004 — intersected 84 metres at 2.6 grams per tonne gold equivalent from 226 metres, including 3.4 metres at 50g/t gold equivalent and a remarkable 0.5-metre interval at 347g/t gold equivalent comprising 20,603g/t silver and 27g/t gold. That single interval defines Silica Hill as a system capable of hosting exceptional bonanza-style mineralisation.

Phase 2 drilling has targeted extensions to the structures that host this style of mineralisation, with the geological interpretation now extended both laterally and at depth. The upcoming Phase 2 assay results will determine whether the system's high-grade character persists into the newly drilled areas.

District-Scale Potential Identified Through Geophysical Review

An integrated review of MobileMT and historical gravity, magnetic, IP, geological and geochemical datasets has highlighted what Kuniko describes as a district-scale exploration opportunity across an approximately 5-square-kilometre prospective area. Multiple high-priority targets have been defined, all sitting within 1 kilometre of the existing Mineral Resource.

The targets include a 4-kilometre conductive corridor northwest of the project through the Coronation and Collings historical deposits, the Silica Hill Extension 200 metres from the existing drilling, and the Welcome Jack, Walls and Stringers deposits — all historically under-drilled. Planning for a regional drilling campaign to test these targets has commenced, with land access secured and permitting in hand ahead of a Q1 CY2027 start. A $1.3 million Placement completed in August funded the Phase 2 program and is supporting the regional campaign planning.

Sector Context

The Lachlan Fold Belt in New South Wales hosts several notable gold and gold-silver deposits, including Newcrest's Cadia-Ridgeway mine and numerous historic producers. The belt is characterised by structurally controlled, high-grade epithermal and intrusion-related gold-silver systems — a geological style consistent with the mineralisation described at Silica Hill. The combination of high-grade bonanza intervals and district-scale target generation positions Commonwealth-Silica Hill as an exploration story capable of attracting attention beyond the junior exploration peer group.

Risks

Phase 2 assay results remain pending and could either confirm or modify the current geological interpretation. The project is at a resource definition stage with no feasibility work completed. The planned regional drilling campaign will require continued Capital deployment, and outcomes from testing new targets are inherently uncertain. Permitting timelines for the regional program, while described as in hand, could affect the Q1 2027 schedule.

What to Watch Next

The near-term focus is on Phase 2 assay results, expected shortly, which will determine whether the 100-metre extension to the mineralised footprint carries economic grades. The updated Mineral Resource Estimate, targeted for December 2026, will translate the combined Phase 1 and Phase 2 drilling into a formal resource statement. Commencement of the Q1 2027 regional drilling campaign will mark the beginning of a new phase of target testing across the broader 5km² prospective area.

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