Lunnon Metals (ASX: LM8) has significantly advanced its Lady Herial gold project, announcing a 49% increase in its Mineral Resource Estimate to 789,000 tonnes grading 2.1 g/t Au for a total of 54,200 gold ounces.
This represents a substantial 49% increase in contained gold ounces since the previous estimate.
Notably, the Measured and Indicated resources now total 599,000 tonnes at 2.3 g/t Au for 41,600 ounces.
The company has also confirmed that mining operations are underway at the project, with first ore deliveries commencing.
This dual-pronged update positions the company for near-term cash flow, supported by an Ore Purchase Agreement (OPA) with SIGM.
Lunnon confirmed there has been no depletion to the MRE to date, indicating the growth is from new understanding and drilling.
Mining Commences, Ore on Route
Mining operations at Lady Herial are officially underway.
The first ore blast has been completed, and ore has been successfully delivered to the ROM pad.
This marks a significant milestone for Lunnon Metals, with the first ore destined for processing at SIGM's Lefroy plant.
Underpinning the near-term cash flow expectations is the existing OPA with SIGM, which facilitates the processing of Lady Herial ore at the Lefroy plant.
First announced on September 19, 2025, the OPA provides a clear and strategic pathway for monetising the gold ore produced from Lady Herial.
Future Upside From Optimisation
Looking ahead, Lunnon Metals plans to undertake open pit optimisation studies.
These will evaluate a potential second mining stage for Lady Herial.
Additionally, the company intends to assess the integration of the nearby Hustler and Northwest Prospect into its near-term plans.
This strategy highlights the potential for further upside through future pit expansions or underground development.
Working Capital Secured for Operations
To support its operational advancements, Lunnon Metals recently secured a $6 million AUD term loan facility.
This funding is dedicated to general working capital and crucial pre-production costs for the Lady Herial Project.
The facility, provided by Bedrock Alpha Credit Income Fund, is repayable eight months after drawdown and is secured against project assets and the OPA.
This ensures the company is well-funded for its current operations ahead of significant cash flow generation from ore sales.
Outlook on Production and Growth
Lunnon Metals has delivered a substantial increase in its Lady Herial gold resource and successfully commenced mining operations, paving the way for near-term cash flow through its OPA with SIGM.
The company is well-positioned with secured working capital and plans for further resource optimisation, balancing immediate production with future growth potential.
