Resource Upgrade Advances Sunshine Metals’ 2026 Gold Production Target—But Challenges Remain
Sunshine Metals has upgraded its shallow gold resource at the Liontown prospect by 14%, enhancing contained ounces and grade ahead of a mining study due in January 2026. The company is advancing drilling and environmental permitting as it targets first production next year.
- 14% increase in contained gold ounces at Liontown shallow gold zone
- Resource now 790Kt at 4.3g/t Au for 108Koz gold
- 22% increase in tonnes and 16% increase in grade in Shallow Gold zone
- Ongoing infill grade control drilling to improve resource confidence
- Mining study on track for completion in January 2026
Resource Upgrade and Study Progress
Sunshine Metals Limited (ASX, SHN) has announced a significant upgrade to the shallow gold resource at its Liontown prospect, part of the Ravenswood Consolidated Project in North Queensland. The updated Liontown Gold Mining Study now incorporates 790,000 tonnes at 4.3 grams per tonne gold, equating to 108,000 ounces of gold; a 14% increase in contained ounces and a 3% improvement in grade compared to previous estimates.
The upgrade is driven by recent drilling campaigns that have enhanced confidence in the mineralisation, particularly in the Shallow Gold zone, which saw a 22% increase in tonnes, a 16% rise in grade, and a 41% jump in contained gold ounces. This zone, along with the Carrington Fresh and Gold Panel zones, now comprises a resource classified as 76% Indicated and 24% Inferred, underpinning the mining study’s scope.
Drilling and Metallurgical Work Underway
Sunshine Metals has commenced an 84-hole, 3,333-metre infill grade control drilling program focused on the Shallow Gold zone. This drilling aims to tighten drill spacing to approximately 12.5 by 12.5 metres, improving resource confidence and potentially upgrading much of the resource to Measured status. Assay results from this program are expected through December 2025 and January 2026, feeding into ongoing discussions with potential toll treatment partners.
Complementing the drilling, metallurgical test work is underway to validate processing methods and recoveries, particularly for gold and silver extraction. Previous metallurgical results from the Gold Panel and Carrington Fresh zones have shown rapid leach kinetics with high gold recoveries, supporting the economic potential of the deposit.
Geological Context and Historical Mining
The Liontown deposit is a volcanogenic massive sulphide (VMS) system with a complex geological setting within the Charters Towers Province. Historical mining between 1905 and 1911 extracted approximately 28,000 ounces of gold at high grades, but recent drilling indicates significant mineralisation remains. The deposit hosts multiple mineralised zones with varying grades and metal associations, including gold, silver, zinc, copper, and lead.
Sunshine Metals’ comprehensive resource estimation incorporates extensive historical and recent drilling data, validated by independent competent persons. The company is advancing geotechnical studies and environmental permitting in parallel with the mining study, aiming to secure all necessary approvals for mining operations.
Path to Production
The mining study is progressing on schedule for completion in January 2026, with Sunshine Metals targeting first gold production at the Ravenswood Consolidated Project within the same year. The study considers both open pit and underground mining methods, leveraging the shallow, high-grade nature of the resource. Environmental permitting and community engagement are integral to the project’s development strategy.
Managing Director Dr Damien Keys highlighted the significance of the resource upgrade and the promising drilling results, noting the historical miners left substantial gold behind. The company’s methodical approach to resource definition and study advancement positions it well to transition from exploration to production.
Bottom Line?
As Sunshine Metals advances its mining study and drilling programs, the market will watch closely for assay results and permitting milestones that will shape the company’s 2026 production ambitions.
Questions in the middle?
- Will the ongoing grade control drilling convert a significant portion of the resource to Measured status?
- How will metallurgical test results influence processing strategies and recoveries?
- What are the timelines and risks associated with environmental permitting and mine approvals?
