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MEDALLION METALS LTD (MM8) - From Acquisition to Production: Medallion Metals Sulphide Strategy
Dive deep into Medallion Metals ambitious gold and copper development strategy with Managing Director Paul Bennett in this revealing conversation. Paul outlines how the company is revolutionising their approach by acquiring the Forrestania processing infrastructure from IGO, a move that dramatically reduces both time and capital requirements on their path to production.
With impressive mineral resources of 1.1 million ounces of gold and 40,000 tonnes of copper in Western Australia's southern goldfields, Medallion is strategically positioned for growth. Paul explains their calculated decision to secure a secondary ball mill ahead of final investment decision, keeping them on track for first metal production by late 2026 and commercial production in 2027.
The economics look compelling – their previous scoping study showed a $329 million NPV and 129% IRR, figures that are likely to improve substantially given rising gold prices and plans to increase mill throughput. Recent drilling at the Kundip Mining Centre has revealed exciting new loads that could extend mine life and increase production rates, while strong interest from offtake partners (with some offering funding solutions up to $85 million) validates the project's quality.
With $29 million in cash reserves and a clear development pathway, Medallion Metals stands at the threshold of transformation. Whether you're an investor seeking exposure to precious metals, a mining enthusiast tracking emerging producers, or simply curious about innovative approaches in the resources sector, this episode offers valuable insights into a company poised for significant growth. Subscribe to ASX Briefs for more conversations with the leaders shaping Australia's mining future.
Andrew Musgrave Host
Welcome again to ASX Briefs, the podcast bringing you closer to the leaders shaping Australia's mining and exploration future and today we're joined by Paul Bennett, the Managing Director of Medallion Metals, a company driving forward a transformative gold and copper production strategy in Western Australia's prolific mining region. Paul, thanks for joining me today and welcome to the ASX Briefs podcast.
Paul Bennett Guest
Pleasure. Andrew, Thanks for having me.
Andrew Musgrave Host
Now, Paul, for investors that may be unfamiliar with Medallion Metals, can you start by just giving a brief overview of the company?
Paul Bennett Guest
Certainly. Medallion's a pre-production gold and copper developer and explorer. Our assets are located in the southern goldfield’s region of Western Australia. The business has got mineral resources of approximately 1.1 million ounces of gold and 40,000 tonnes of copper metal. We've recently announced a transaction with IGO to acquire the Forrestania processing infrastructure and we're looking to progress to development quite quickly under the new sulphide production strategy.
Andrew Musgrave Host
Okay now, Paul, securing the secondary ball mill marks a major milestone, so can you walk us through how this investment strategy accelerates the development timeline for the sulphide production strategy?
Paul Bennett Guest
Yes, certainly so. The ball mill itself will take approximately 32 weeks to manufacture in China and then get to a port of export, and then it's another 10 weeks beyond that to get it to Australia and then out to Forrestania, subject to it clearing customs, all of that sort of thing. So, to preserve our development time frame and we'd like to be producing first metal towards the end of 2026 and then into commercial production rates at 2027, we need to get moving on getting that ball mill in situ in Forrestania. So that's the reason we undertook that investment pre the final investment decision, which will be coming before the end of this calendar year.
Andrew Musgrave Host
Okay, and the feasibility study is approaching completion. So, can you share how the recent update to the sulphide mineral resource estimate will shape the mine design and scheduling?
Paul Bennett Guest
Yeah, we're sitting at roughly 950,000 ounces at 5.2 grams gold equivalent in that most recent sulphide mineral resource estimate update. That's the basis of the feasibility study which in turn will form or provide the basis for the board to make a final investment decision. So that mineral resource is now going through its mining study phase. There's been a significant amount of metallurgical test work and process engineering going on. They're the key pieces of work that feed into the overall analysis of the technical and the commercial merits of going ahead with the development at Ravensthorpe, with processing at Forrestania. So, all of that's coming together. We'd expect that late October, early November, we'll be releasing the results of that study to the market.
Andrew Musgrave Host
Okay, and now that the Forrestania acquisition is binding, how do you view the strategic benefits of integrating RGP and FNO, especially from an infrastructure reuse and capital efficiency perspective?
Paul Bennett Guest
Yeah, that's really the core of the sulphide production strategy which we've mentioned earlier in our discussion, and it's really all about reducing time, reducing costs to get to first production. So, we identified this opportunity over 12 months ago to bring our mineral resources together with the established infrastructure at Forrestania. So, what that does is reduce the amount of capital that we need to get to that first production. In addition to that, by focusing on the sulphide element of the mineral resource at Ravensthorpe in isolation, that's the best understood, the highest value subset of that resource what we do is also reduce the development or the disturbance footprint at the mine part of the project, and what that's done is led to a streamlined pathway through the permitting process compared to what we might have otherwise been faced with under that standalone development scenario. So again, this is all about shortening the time and reducing the cost to get to first production.
Andrew Musgrave Host
Okay, and the December scoping study projected a robust 329 million NPV10 and 129% IRR. So how have market conditions or internal project refinements since then influenced your expectations heading into the final investment decision?
Paul Bennett Guest
Alot's changed. That was December 2024 that that study was released, and obviously gold prices have moved in our favour over that intervening period. So, I think we ran as a base case $2,350 US dollars an ounce with a 65-cent exchange rate. Now spot prices are now sitting at US$3,600 an ounce, so I'd expect that that will have a dramatic impact on the economics of the project. All other things being equal, we won't run a spot scenario, but it'll be at some discount to the prevailing spot price at the time. In terms of other elements of the study, the mineral resource update will, I think, lead to an increase in the mineral inventory. We're also expecting to run a higher throughput rate through the mill as well, so targeting 600,000 to 650,000 tonnes per annum relative to the half a million tonne per annum throughput rate we modelled in the scoping study. So, all of those things I think bode well for enhancing those project returns, enhancing the payback period.
Andrew Musgrave Host
Okay, and looking at the Kundip Mining Centre, which recently reported promising infield drilling results, including previously unknown lodes. So, can you share what this might mean for the future resource growth or potential mine life extension?
Paul Bennett Guest
Yeah, that was a really pleasing outcome. That drill program that we undertook in late 2024 and early 2025 had a real infill objective to it. That was what was underpinning the strategy there. But we were very pleased to see some new lodes intersected, particularly in the footwall at Gem and the footwall at Harbour View. So, there's drilling that needs to follow up and prove up those new lodes that we've hit. But we'd expect that at the very least, if they come in, that they're going to extend the mine life. But they also have the potential to increase the production rate as well because they're establishing a new production horizon off the same level as the other deposits that we're already aware of so potentially two elements to the upside from those lodes.
Andrew Musgrave Host
You've also flagged plans to mandate offtake and finance partners, so what can investors expect in terms of capital structuring and funding strategy leading up to project execution?
Paul Bennett Guest
So, the project will produce a copper concentrate as well as gold and silver dore and we found that there's been a significant amount of interest from potential customers for that copper con with the precious metal credit. We formalised that process due to a lot of inbound interest, unsolicited interest, and received up to 14 proposals and some of those had attaching funding solutions with them for up to AUD$50 million. So, we are progressing the discussions with those parties. We've shortlisted now and we expect that in the next couple of weeks we'll select our preferred offtake and financing party. And if we can progress one of those indicative offers of a project loan to a credit approved offer of finance, then that puts in place that base, foundational piece of capital around which you can build the mine.
Andrew Musgrave Host
Okay, now just to wrap things up with $29 million in cash reserves and a busy work program ahead, how is the company positioning itself to deliver continuous news flow and milestones that support shareholder value?
Paul Bennett Guest
Well, 2025 and 2026 are going to be packed with positive news flow. In the short term, we will have some positive updates in relation to permitting, the feasibility study will be coming out, we'll have an announcement around the financing and the offtake as well, and then, as we get towards the end of the year, anticipating final investment decision and closing of the transaction with IGO. So, a lot to happen between now and the end of the year and, subject to all of those things going the way we expect them to. Then we roll into development, into production throughout 2026. And we'll also, at that point in time as well, also be able to get on the ground at Forrestania and begin some preliminary drilling, preliminary exploration activities for the gold opportunity at that end of the asset as well.
Andrew Musgrave Host
Okay, Paul. Well, it's been great to have you on the podcast today, so thanks very much for your time and we look forward to further updates for Medallion Metals in the upcoming months.
Paul Bennett Guest
Thanks, Andrew, it was a pleasure.
Andrew Musgrave Host
That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.