Meeka Metals’ Cost Efficiency and Production Ramp-Up Key to Murchison’s Next Phase
Meeka Metals delivered a strong September quarter with gold production exceeding feasibility study forecasts and costs coming in below plan, underpinning confidence in the Murchison Gold Project’s growth trajectory.
- Gold production of 7,148oz at $2,133/oz AISC beats feasibility study start-up plan
- Cash and gold holdings rise to $59.3 million after $21.8 million growth capital investment
- Open pit mining reaches steady state with three fleets, building high-grade ore stockpiles
- Underground development advances 447m at Andy Well under owner-operator model
- Processing unit costs 19% below plan, expected to decline further with throughput gains
Strong Operational Momentum
Meeka Metals Limited has reported a robust start to the 2025 financial year, with its September quarter gold production of 7,148 ounces comfortably exceeding the feasibility study’s start-up plan. The company achieved this at an all-in sustaining cost (AISC) of $2,133 per ounce, demonstrating operational efficiency amid ongoing commissioning and optimisation of the processing plant.
Ore throughput also outperformed expectations, with 84,000 tonnes processed at a grade of 2.7 grams per tonne and metallurgical recovery holding steady at 98%. Processing unit costs averaged $43 per tonne, 19% below the feasibility study benchmark, and are anticipated to fall further as plant throughput increases in the coming months.
Mining Strategy and Stockpile Build
The accelerated open pit mining strategy reached steady state during the quarter, with three mining fleets operating simultaneously. This approach has successfully brought forward high-grade ore, increased production flexibility, and built a substantial ore stockpile of approximately 68,000 tonnes at 1.9 g/t gold, alongside 110,000 tonnes of lower-grade ore. These stockpiles provide a buffer that de-risks future production and supports potential plant expansion.
Open pit mining produced 12,318 ounces of gold from 236,000 tonnes mined at 1.6 g/t, with actual gold extraction exceeding the feasibility study’s mineral resource estimates by 38%. This positive reconciliation suggests the resource model may be conservative and bodes well for future production.
Underground Development Progress
Underground mining at the Andy Well deposit is advancing steadily under Meeka’s owner-operator model. Development work completed 447 metres during the quarter, with ore development commencing in late September. The addition of a second development jumbo in September and a third planned for the December quarter signals an acceleration in underground activity, which will introduce fresh ore to the processing plant blend and support throughput improvements.
Financial Position and Outlook
Meeka Metals ended the quarter with a strong cash and gold position of $59.3 million, including $34 million in cash and $25.3 million in gold inventory. The company remains debt-free aside from underground mining equipment finance and is fully exposed to the spot gold price, with no hedging in place. Growth capital expenditure totaled $21.8 million, primarily directed at new open pits and underground development.
Managing Director Tim Davidson highlighted the encouraging operational performance and reaffirmed the company’s focus on ramping up gold production and free cash flow in line with the established ramp-up plan. The absence of lost time injuries and no significant environmental incidents underscore Meeka’s commitment to sustainable and safe operations.
Looking Ahead
With open pit mining now at steady state and underground development gaining momentum, Meeka Metals is well positioned to increase production in the December quarter. The company’s strategic stockpile build and ongoing plant optimisation suggest further reductions in unit costs are achievable, supporting improved margins as production scales.
Bottom Line?
Meeka Metals’ strong operational and financial performance sets the stage for a promising ramp-up phase at Murchison, but market watchers will keenly observe cost trends and underground production delivery.
Questions in the middle?
- Will underground mining at Andy Well meet ramp-up targets and contribute meaningfully to production?
- How will fluctuating gold prices impact Meeka’s unhedged exposure and cash flow?
- Can processing unit costs continue to decline as throughput increases, sustaining margin improvements?
