This article is a sponsored feature from Mining.com.au partner Medallion Metals Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
While the gold price has been on a steep upwards trajectory in recent times, albeit with a short-lived pullback following Donald Trump’s US presidential election win, the junior gold explorers have not necessarily travelled the same path. But that could be about to change.
Gavin Wendt, resources analyst and founding director of MineLife, says prices appear to have stabilised and after a period of consolidation are likely to head higher into 2025 on the back of further US interest rate cuts.
“Gold has effectively been in a +25-year uptrend (up by around 800%) and I don’t see any reason why this won’t continue, as all of the same factors are still in play – i.e. escalating global debt, weaker fiat currencies, and central bank buying,” he tells Mining.com.au.
“All three of these factors are connected. The next price challenge for gold will be the US$3,000 ($4,603) per ounce mark.”
The gold price is currently tracking steadily at over US$2,600 an ounce after its dip following the US presidential election outcome.
The reason gold cooled somewhat following Trump’s victory is because he is viewed as less aggressive than outgoing President Joe Biden, who not long ago sanctioned longer-range missiles to be launched into Russia by Ukraine, Brookville Capital CEO Simon Popple told Mining.com.au in November.
“I think that Trump is viewed as more likely to agree a peace deal with Russia and Ukraine than probably Biden,” he said.
While to date producers are predominantly the ones witnessing the investor interest, the continued strength in price could see that flow through to those closing in on production.
Medallion Metals fast-tracks production plans
Medallion Metals (ASX:MM8) is mapping its path to production having recently secured an exclusivity agreement with IGO (ASX:IGO) to acquire the Cosmic Boy processing facility, part of the Forrestania Nickel Operation in Western Australia.
The move is part of a strategy to provide the explorer with a near-term path to production for its flagship Ravensthorpe Gold Project and keep costs at the lower end of the scale, according to Managing Director Paul Bennett.
The Ravensthorpe Project is located 550km southeast of Perth, at the intersection of the Southern Cross greenstone belt and the Albany Fraser Orogen.
“Given the established infrastructure at Forrestania, the strategy minimises upfront capital,” he says.
“More generally there are an array of synergies that come with Forrestania including the ability to take the established systems and procedures from that project and apply them at Ravensthorpe, in addition to us redeploying surplus mine infrastructure which has the potential to unlock significant upfront capital savings while also advancing the rehab effort at the northern end.”
Key de-risking milestones for Medallion are to reach binding documents with IGO and understand the permitting pathway.
Bennett says the company will have more clarity on timing early next year.
“Over the interim it’s all about getting to a Bankable Feasibility Study (BFS) and final investment decision (FID),” he explains.
“We are circa 10,000m through a 15,000m drill program at Ravensthorpe to nail the first three years of the mine plan and collect metallurgical samples. The metallurgical testwork program and engineering is underway.
“Multiple study elements are being progressed with a view to having the BFS complete in 3Q25 and FID following shortly thereafter.”
Unlocking value in Forrestania’s goldfields
The acquisition of IGO’s Cosmic Boy process plant and related infrastructure would see the accelerated commencement of gold mining at Ravensthorpe under a sulphide gold development scenario.
This includes an underground operation, with Medallion targeting the highest value, lowest risk ore.
Bennett says the Ravensthorpe resources reported in the fresh ore only and above a 2 gram cut-off stand at 770,000 ounces of gold at 4.3 grams per tonne gold and 0.6% copper.
“We expect around half of that to convert to the mine plan in the first instance and we expect ongoing conversion over time,” he tells this news service.
Bennett adds that recent infill drilling results of 10m @ 19.9g/t gold and 3.2% copper and 4m @ 15.6g/t gold and 0.7% copper significantly exceed the block model as currently interpreted.
“Together we see potential for an upgrade to the existing estimate and extensions both at depth and along strike,” he says.
Medallion expects to have the full 15,000m program completed by the end of January or early February 2025.
“We’ve reported about 1,000m of the drilling of the 15,000 metres planned and we like what we’re seeing from a visual point of view,” Bennett says.
Medallion is also negotiating with IGO on a non-exclusive basis to acquire the gold and silver rights across the broader Forrestania land package.
Bennett says the Forrestania greenstone belt is a former goldfield that has been trapped in a nickel business for a generation with no modern exploration techniques brought to bear.
But Medallion likes what it’s seeing from its review of the data so far.
“There are multiple gold targets known and, we think, potential to uncover many more,” Bennett notes.
“More broadly there are numerous known gold deposits located within economic trucking distance of Cosmic Boy.
“Establishing gold processing capability at Cosmic Boy means Medallion is well placed to participate in unlocking that trapped value.
“All of that unfolding in a gold price environment that’s close to all-time highs and hopefully trending higher. That should be supportive for accessing both equity and debt capital markets to develop a new mine.”
Images: Medallion Metals
