Minerals 260 Shares Rise 8.5% as Gold Developer Reports About A$600 Million Cash and Bullabulling Progress

Minerals 260 Ltd shares rose more than 8% on Tuesday. The gold developer told investors it had about A$600 million in pro forma cash and remained on track for a final investment decision on its Bullabulling project in Western Australia early next year.

Minerals 260 shares gained 6 Australian cents, or 8.45%, to close at 77 cents. In the session they traded between 71 cents and 78 cents. About 7.9 million shares changed hands, and the company's market value rose to about A$1.9 billion.

The stock is up about 161% over the past year, making it one of the best-performing companies in the S&P/ASX 200. The index rose 0.46% to 8,850.1 on Tuesday.

Quarterly update

The gains followed the company's update on the September quarter, which management discussed on an investor call.

"We finished the quarter with a pro forma cash balance of around AUD 600 million," Managing Director Luke McFadyen said.

"We are incredibly well-funded to continue to progress and de-risk the development of Bullabulling ahead of FID," he said.

Key points from the update:

The company completed its first grade control drilling program of 26,000 meters, and a second program is set to start shortly. It installed 22 water bores at the project. The expanded mining lease was granted during the quarter. Remaining approvals are under assessment through Western Australia's state approvals process. The board approved 200 more rooms for the project's accommodation village, bringing planned capacity to 600. The village is expected to be fully operational in the first quarter of 2027.

"We remain on track to deliver the DFS in the first quarter of next calendar year," McFadyen said, referring to the definitive feasibility study.

"We expect the required approvals to come in time to support FID early in the next year," he said.

Funding the build

Minerals 260 raised A$250 million through a two-tranche share placement at 88 cents a share in September. Royalty company Franco-Nevada committed A$30 million in equity as a cornerstone investor and agreed separately to A$170 million in royalty funding.

The company plans to cover the rest of the project's estimated A$855 million pre-production capital cost with traditional project finance. It said bank engagement has been positive.

A share purchase plan for retail investors, which targeted up to A$30 million at the same 88-cent price, fell short of its target. McFadyen said that was expected with the stock trading below the offer price.

"The outcome was not surprising at all, given the difference between the offer price and the share price," he said.

A 6.2-million-ounce project

Bullabulling, about 25 kilometers southwest of Coolgardie in Western Australia's Goldfields, hosts a mineral resource of 6.2 million ounces of gold, up from 4.5 million ounces in the pre-feasibility study. Indicated resources rose to 4.4 million ounces from 3 million.

The July pre-feasibility study outlined a 19-year mine life producing about 150,000 ounces a year, with a post-tax net present value of about A$2.3 billion. The company aims to start production by the end of 2028.

Earlier this month, the company reported grade control results that McFadyen said strengthened confidence in the resource. The results included a narrow, high-grade intercept of 1.1 meters at 290 grams per ton of gold.

Gold backdrop

Gold prices have been volatile. Bullion fell below US$4,000 an ounce last week for the first time in about three months, then recovered to around US$4,013 overnight as lower oil prices eased inflation concerns before the Federal Reserve's meeting this week.

Developers such as Minerals 260 tend to be especially sensitive to gold price swings, because their valuations depend on future production.

Still below placement price

Even after Tuesday's gain, the shares remain below the 88-cent placement price. Investors will be watching for the definitive feasibility study, the approvals and the project finance package, all needed before a final investment decision in early 2027.

_This article is for information only and does not constitute financial advice._