Lunnon Metals Secures Ore Purchase Agreement for Lady Herial Gold Deposit

Lunnon Metals (ASX: LM8) has executed an ore purchase agreement (OPA) that will provide an early cash flow opportunity from the Lady Herial deposit, part of the company’s Kambalda gold and nickel project in Western Australia.

Lunnon will sell St Ives Gold Mining – a wholly owned subsidiary of major Lunnon shareholder Gold Fields – any material it mines from Lady Herial with a gold grade of at least 0.5 grams per tonne.

The signing of the OPA follows the period of exclusive negotiation between the two parties in effect since mid-June 2025.

Positive Scoping Study

The agreement also comes after the recent scoping study Lunnon conducted at Lady Herial, and a maiden mineral resource estimate for the project of 29,000 ounces of contained gold.

The scoping study, which Lunnon based on open-pit optimisation and mine design, found that the deposit is in an excellent position to exploit the high gold price environment, concluding that Lunnon can generate between 210,000t gold at 2.0g/t and 355,000t at 1.8g/t from Lady Herial, yielding between 12.9koz and 19.7koz recovered gold.

It also forecast a pre-tax free cash flow of $44.7 million at a gold price of A$5,000/oz, with an excellent all-in-cost of approximately $2,100/oz of gold produced.

‘Unique Opportunity’

“We recognised very early on that Lady Herial presented a unique opportunity to drill out, define, and de-risk a high-grade, outcropping, thick zone of gold mineralisation,” managing director Edmund Ainscough said.

Lunnon recently submitted the required mining approval applications to the WA Department of Mining, Petroleum and Exploration to allow the development to proceed.

“Once we receive the approvals the goal will be to mine Lady Herial safely, efficiently, to plan and within budget—and in parallel, deliver more exciting gold discoveries as quickly as possible,” Mr Ainscough added.

New High-Grade Assays

Lunnon reported significant high-grade gold assay results from infill drilling at Lady Herial earlier this week, including 26m at 6.37g/t, 14m at 18.07g/t, and 7m at 34.38g/t.

The program is aiming to complete all essential drilling before development commences, and de-risk the deposit as much as possible prior to mining.

Lady Herial is host to two main structures, the Upper and Lower, along with an intermediate Middle zone that contains a relatively minor amount of the overall gold the company has so far modelled.

While Lunnon has now received the majority of assay results from the Upper Structure, those from the Middle and Lower Structures are still pending.