How Nelson’s $10M MEGA Deal Could Unlock Yarri Gold’s Potential

Strategic Partnership to Propel Yarri Forward

Nelson Resources Limited (ASX, NES) has taken a significant step towards developing its Yarri Gold Project by signing a Right to Mine Agreement with MEGA Resources, a subsidiary of the global mining contractor Bain Global Resources. This partnership promises to inject both technical expertise and substantial financial backing into the project, located 140 kilometres northeast of Kalgoorlie, Western Australia.

Under the terms of the agreement, MEGA will fully fund initial exploration activities up to $500,000 and provide up to A$10 million in development and working capital. This funding structure notably removes the need for Nelson to contribute upfront capital, thereby reducing financial risk and enabling a smoother transition from exploration to mining operations.

Integrated Mining and Funding Solution

MEGA’s role extends beyond financing; it will manage mining, haulage, geological, and engineering services, as well as oversee all necessary project permitting and approvals. The agreement covers mining lease applications that encompass the Yarri project area, positioning MEGA as a turnkey operator responsible for delivering the project from drilling through to ore haulage.

Profit sharing is structured with MEGA receiving 70% and Nelson 30% of profits from ore sales, which will be processed by a third-party facility. While discussions with potential processors are ongoing, the finalisation of this agreement is a key condition precedent before mining can commence.

De-risking Through Expertise and Capital

Nelson’s Executive Chairman, Gernot Abl, highlighted the strategic advantage of partnering with MEGA, citing the contractor’s extensive experience and robust balance sheet as critical enablers for disciplined project advancement. The arrangement allows Nelson to focus on exploration support while leveraging MEGA’s operational capabilities and financial muscle to expedite progress.

Currently, the teams are advancing drilling programs and working through regulatory approvals, with the goal of moving swiftly towards a mining decision. The agreement’s structure, which ties MEGA’s repayment to project revenues, aligns incentives and mitigates upfront financial exposure for Nelson.

Next Steps and Market Implications

Key milestones ahead include the conversion of prospecting licences into mining leases, securing mining approvals, and finalising an ore processing agreement. Success in these areas will pave the way for MEGA to commence mining operations under the agreed terms.

This partnership represents a meaningful de-risking of the Yarri Gold Project and positions Nelson Resources to potentially accelerate its path to production with a trusted mining contractor at the helm.