Key Highlights

  • Produced 230,256 ounces of silver, 1,714 tonnes of zinc and 1,146 tonnes of lead from 68,334 tonnes of ore processed, generating A$31 million in cash from sales
  • Updated Mineral Resource of 20.7 million tonnes at 82 g/t silver containing 54.3 million ounces, including a newly defined Upper Main Lode of 1.6 Mt at 234 g/t silver, 8.5% zinc and 6.0% lead
  • Quarter-end cash of A$35.4 million (comprising A$7.4 million unrestricted and A$28.0 million restricted), with Debt of A$18.1 million and additional Working Capital extended through a US$10 million Facility with Ocean Partners
  • Completed the A$28 million rehabilitation bond exchange securing 100% ownership of Endeavor, with the Cobar property portfolio independently valued at A$19 million

Polymetals Resources Ltd (ASX:POL), an Australian silver and zinc producer, reported its September 2026 quarterly results for its Endeavor Mine in New South Wales, with production falling below plan as the company executed two significant operational changes that management regards as necessary steps toward a more productive and reliable Mining operation.

Endeavor produced 230,256 ounces of silver, 1,714 tonnes of zinc and 1,146 tonnes of lead from 68,334 tonnes of ore processed during the quarter. Sales generated A$31 million in cash. Production was affected by two main disruptions: a 10-day suspension of underground mining activities to complete essential ventilation modifications, and the commencement of a transition to contract underground mining labour through RND Resources. Both interventions were planned, and management expressed confidence that they position the operation for improved consistency going forward.

Chairman's commentary accompanying the Quarterly Report acknowledged the operational shortfall directly, noting that while the changes disrupted production, they are central to establishing a more productive mining operation. Early productivity improvements have already been observed as the in-house and contract teams work through the transition period.

Upgraded Mineral Resource Underpins Long-Term Value

A significant development during the quarter was the updated Mineral Resource estimate for Endeavor, published in September 2026 using the 2018 JORC reporting standard. The updated resource stands at 20.7 million tonnes at 7.5% zinc, 4.2% lead and 82 g/t silver, containing 54.3 million ounces of silver, 1.55 million tonnes of zinc and 0.86 million tonnes of lead.

A major contributor to the update was the delineation of a new Upper Main Lode Mineral Resource, which returned 1.6 million tonnes at 234 g/t silver, 8.5% zinc and 6.0% lead — an exceptionally high-grade zone resulting from drilling undertaken between May and August 2026. Polymetals management described this as demonstrating the value of revisiting historical geological interpretations and recognising previously overlooked mineralisation within established mining corridors. Development toward the Upper Main Lode has already commenced, with first ore expected during the December 2026 quarter.

Upper Main Lode drilling also returned further high-grade results including an intersection of 14.2 metres at 494 g/t silver, 7.1% lead and 4.8% zinc, confirming the continuity and grade of this newly defined zone.

Corporate and Financial Position

On the corporate side, Polymetals completed the A$28 million rehabilitation bond exchange during the quarter, securing 100% ownership of the Endeavor Project. The transaction also transferred a Cobar property portfolio that has been independently valued at A$19 million, adding Tangible Asset value to the company's balance sheet.

Quarter-end cash stood at A$35.4 million, comprising A$7.4 million in unrestricted cash and A$28.0 million in restricted cash supporting the rehabilitation bond. Net debt, incorporating A$18.1 million in borrowings, leaves the company with adequate near-term liquidity. Working capital headroom was extended through an additional US$10 million facility from Ocean Partners, a precious metals streaming and offtake specialist.

Sector Context

Silver has attracted renewed attention from Commodity markets as both an industrial metal with critical applications in solar panels and electronics, and a monetary metal historically correlated with gold price movements. The combination of silver, zinc and lead production at Endeavor provides Polymetals with exposure to multiple commodity price scenarios. Australia's broader base metals sector has seen increased activity as domestic and international Demand for electrification minerals continues to underpin project economics.

Risks

The transition to contract mining introduces execution risk in the near term, and the full productivity benefits of the RND Resources arrangement may take additional quarters to materialise. Silver and zinc price movements remain a primary Revenue driver, and adverse commodity price shifts would directly affect cash generation. The restricted nature of A$28 million of Polymetals' cash position limits financial flexibility to A$7.4 million in unrestricted funds, making the Ocean Partners facility extension important for operational continuity.

What to Watch Next

The December 2026 quarter will be the critical test of the new contract mining arrangement, with production guidance set at 105,000 to 115,000 tonnes of ore processed to recover more than 350,000 ounces of silver. First ore from the high-grade Upper Main Lode is anticipated during that quarter, which could meaningfully lift head grades and silver recovery. An updated Endeavor Ore Reserve estimate is also planned for the December quarter, which may further define the scale of the recently delineated Upper Main Lode.