Lunnon Metals Records Best Gold Production Month to Date from Lady Herial Open Pit

Lunnon Metals (ASX: LM8) has cited June as its best month to date at the Lady Herial open pit in Western Australia, with over 62,000 tonnes ore mined at 1.73 grams per tonne for 3,473 ounces gold.

Despite three full days lost due to rain, total volume mined from the pit was just over 106,000 bank cubic metres.

Drilling and blasting was completed for the 295mRL1 and the 290mRL benches in the north pit and the final level of the floor in the south pit.

Lady Herial’s abandonment bund is 80% complete with progressive rehabilitation and spreading of stockpiled topsoil on the waste dumps continuing in parallel to open pit operations.

Lunnon commenced mining at Lady Herial in February and the first stage is scheduled for completion in September.

St Ives Purchasing Agreement

An ore purchase agreement signed in September with Gold Fields subsidiary St Ives Gold Mining continues to operate seamlessly, delivering nearly 207,000t at 1.59g/t gold for 10,561oz and yielding 9,613 ounces gold at an agreed 91% metallurgical recovery.

St Ives paid Lunnon $12 million in June, as per the terms of the agreement, while outgoing expenses related to the Lady Herial operation for the same period totalled approximately $3m.

Total ore tonnes and gold delivered to St Ives is currently on target and to month end, approximately 90% of the overall pit volume and 66% of the gold had been mined.

As planned, total volumes to be mined and waste-to-ore ratios will reduce as the company approaches first stage completion, further improving the operating margin for the remaining months.

The opportunity to excavate select ‘goodbye’ cuts is yet to be evaluated and any ore realised will be additional to the planned ore agreed with St Ives.

New Financial Year Outlook

Lunnon managing director Edmund Ainscough said Lady Herial had set the company up for the new financial year.

“Lady Herial has just a few months left but the mine has recharged our cash, reinvigorated our team, and put us in the best possible position to ensure that our first gold deposit is not our last gold discovery,” he said.

The Lady Herial feasibility study released in January used a record high gold price of $7,000 per ounce to estimate that mining of 268,000 tonnes at 1.89g/t for 16,270oz gold would yield approximately $45m in pre-tax cash flow for Lunnon.

The price has since dropped to around $5,750 per ounce and, with the remaining open-pit forecast to be completed as planned, the company is on track to achieve a free cash flow total within 7% of the results modelled in the study.