Lunnon Metals (ASX:LM8) has approved the final investment decision for its Lady Herial Project after completing a feasibility study and confirming that the ore purchase agreement with major shareholder St Ives Gold Mining is now unconditional.
The study, released to the ASX on Jan, 16, highlighted strong economics for a short-life, high-grade, low strip ratio open pit, with operating pre-tax free cash flow projected at $40.4 million at $6,250/oz, $42.9 million at $6,500/oz, and $47.9 million at $7,000/oz. Current spot gold prices sit around $6,900/oz.
With the FID approved, Lunnon Metals is set to execute mining contracts with Hampton Civil and Mining for mining operations and Goldfields Technical Services of Kalgoorlie for statutory roles, blast design, dig plans, and mine geology.
Once contracts are finalised, mining is expected to commence promptly.
Non-Executive Chair Liam Twigger said, “Approving the FID is a proud moment for Lunnon Metals. Moving from discovery to production in under two years demonstrates the drive and capability of our management team and provides a strong platform to deliver shareholder value.”
At the time of reporting, Lunnon Metals' share price was $0.48.