In what can only be described as a red-letter day, Forrestania Resources has delivered a stunning raft of news to the market, including prefeasibility studies (PFS) for its Edna May, British Hill, Tycho and Johnson Range projects in Western Australia. Additionally, the company has unveiled maiden ore reserves for Edna May, Johnson Range and Tycho and reported a monster gold hit at its British Hill project.
If that's not enough news, the company has also just been added to the VanEck Junior Gold Miners exchange traded fund (ETF), one of the most significant and widely-followed ETF's for junior listed gold companies in the world.
Forrestania’s grand plan is to build a two-hub WA gold production business, using its 2.9Mtpa Edna May plant at Westonia and the refurbished 3.2Mtpa Lake Johnston facility as the processing engines for a growing stable of satellite deposits. The strategy is classic hub-and-spoke: consolidate gold resources across the region, bring the most economic deposits into production and funnel ore through existing processing infrastructure, sidestepping the cost and time of building a new mill for every mine.
Kicking off the headlines is the Edna May PFS. The study demonstrates a significant development opportunity underpinned by a maiden 12.6-million-tonne ore reserve for 402,800 ounces of gold grading 0.99 grams per tonne (g/t) that leverages the existing Edna May processing infrastructure. The fresh study estimates pre-tax undiscounted free cash flow of a whopping A$728.7 million at a gold price of A$5500 per ounce.
The operation is expected to include 10 years of mining and nine years of milling at an average all-in sustaining cost (AISC) of A$3293. Forrestania estimates the capital costs to bring the mine to life at roughly A$98M with impressive metallurgical recoveries of 93 per cent.
Edna May features a mineral resource estimate of 945,000 ounces of gold, with potential to extend the project if the resource can be further upgraded to reserve status. Impressively, using a gold price of A$6140 per ounce, close to the current spot price, estimated pre-tax undiscounted free cash flow slingshots to a stellar A$961M with an average AISC of A$3313 per ounce. The company expects Edna May to form a key piece of its Westonia hub strategy.
Forrestania Resources executive chairman David Geraghty said: “The Edna May Ore Reserve and Pre-Feasibility Study provide a strong technical and economic basis for the redevelopment of this established gold operation. The study benefits from substantial existing infrastructure, a proven processing facility and a long operating history, while identifying a clear pathway to restart and future production.”
Next cab off the rank is British Hill, 75 kilometres south-east of Southern Cross in WA; the PFS tips $104.8 million in pre-tax free cash flow from the gold project. The numbers are underpinned by a maiden probable ore reserve of 1.563Mt grading 1.43g/t gold for 71,900 ounces. The two-year operation is expected to produce about 63,900 ounces of gold, with mining running for 23 months and processing across 11 months after ore is trucked 145 kilometres to Forrestania’s recently acquired 2.9Mt per annum Edna May plant.
The company has pencilled in a January 2027 start, with development capital estimated at a relatively modest A$16.1 million, average recoveries of 89 per cent and an all-in sustaining cost of A$3609 an ounce based on a A$5500 gold price. Notably, at a gold price of A$6140 an ounce, the numbers grow considerably, with pre-tax free cash flow swelling to A$144.4M. British Hill carries a broader 175,000-ounce resource and another 12,200 inferred ounces already sitting inside the planned pit shell but excluded from the reserve, leaving Forrestania with some ammunition to potentially extend the mine life as drilling continues.
Adding to the project's news, ongoing drilling results from a 15-hole reverse-circulation (RC) program have smashed it out of the park, delivering a spectacular 59-metre intersection grading an impressive 2.38g/t gold from 123m.
Other significant high-grade intercepts included 19m at 2.15g/t gold from a shallow 43m, 14m grading 2.20g/t gold from 260m and 13m going 2.36g/t gold from 255m. The company says the drilling was designed to sharpen its current geological model of the deposit and to potentially grow the current mineral resource estimate.
Forrestania believes the latest drilling has revealed the mineralisation extends further to the west and at depth, pushing beyond the boundaries of the previously known system. A diamond drill rig has now been mobilised to the site to test mineralisation below the current RC drilling limits.
Also with plans to provide feed for Edna May, the company has dropped a study on its Tycho project, a satellite deposit sitting 278km by road from the plant. Hosting a probable reserve of 418,000 tonnes grading 1.10g/t gold for 14,700 ounces, mining is expected to be completed within eight months to produce 13,000 ounces of gold for a pre-tax cashflow of $9.9 million. Development capital has been pegged at $11.5 million, average recoveries at 88 per cent and an all-in sustaining cost of $3849 an ounce.
Moving onto Forrestania's Johnson Range project, a new PFS there has firmed up a maiden probable ore reserve of 308,000 tonnes grading 2.88g/t for 28,500 probable ounces of gold. The study outlines a short 12-month project life and a near-term development opportunity, projecting a solid pre-tax undiscounted free cash flow of $60.1 million at a gold price of A$5500 per ounce and an average all-in sustaining cost of A$2905 per ounce.
Impressively, at a gold price of A$6140 per ounce, pre-tax undiscounted cash flow balloons to a hefty $76.8M with an average all-in sustaining cost of A$2924 per ounce. The operation is slated to require just A$8.0 million in total project capital and will leverage existing infrastructure by hauling ore 236km to Forrestania’s Edna May processing facility.
For Forrestania, delivering four fresh project studies in one hit slots neatly into its aggressive regional consolidation strategy that is rapidly transforming the company from a grassroots explorer into an emerging producer.
Complementing Forrestania's centrepiece Edna May plant, which is due to restart in early 2027 once replacement SAG and ball mill liners have been installed, the company has been busy fixing up its other processing plant at Lake Johnston, 185 kilometres southwest of Kalgoorlie. Major refurbishment works are already well advanced and, once both plants are fully operational, Forrestania will command a formidable combined processing capacity of more than six million tonnes of ore per annum.
Forrestania has already begun trucking material from British Hill to its Lake Johnston processing facility, providing the project with a potential pathway to production as the company advances its dual-hub gold strategy. Longer term, however, British Hill ore will feed Edna May.
Rounding out the flood of announcements, Forrestania revealed it will be added to the VanEck Junior Gold Miners ETF code GDXJ one of the most significant and widely-followed exchange-traded funds for junior gold companies in the world. Inclusion in the GDXJ is a significant milestone that provides a stamp of approval from the global investment community. It is expected to increase the company’s exposure to international investors and potentially boost liquidity in its shares.
With key development studies and maiden ore reserves now in the bag across all four projects, Forrestania has laid out a clear pathway towards near-term cash flow. Throw in its inclusion in a major global gold fund and a fresh round of diamond drilling at British Hill aimed at proving the system still has plenty more to give, and punters could be forgiven for needing a breather just to keep up with the news flow.
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By Murray Ward
