Lunnon Metals (LM8) Q4 2024 TU earnings summary

Executive summary

• Gold exploration at Lady Herial and Hustler delivered high-grade, shallow results, positioning gold as a near-term value driver.

• Updated Mineral Resources at Baker (1.0Mt @ 3.3% Ni) and Foster South (375kt @ 4.7% Ni) increased contained nickel by 9% and 10% respectively.

• Baker Mining Proposal approved; mine studies for Baker and Foster largely complete, de-risking future production.

• BHP Nickel West's decision to suspend operations until at least February 2027 allows pursuit of alternative nickel processing solutions.

• Strong cash balance of $22.0 million as of 30 June 2024, following cost reductions and reduced exploration spend.

Financial highlights

• Cash at 30 June 2024: $22.0 million (down from $23.9 million at 31 March 2024).

• Net payments for exploration, evaluation, and development in the quarter: $0.93 million, significantly lower than the previous quarter ($2.65 million).

• Monthly exploration and corporate costs reduced from ~$1.5 million to ~$0.65 million.

• Estimated 12 quarters of funding available at current expenditure rates.

Outlook and guidance

• Focus remains on advancing gold prospects, especially Lady Herial, with follow-up RC drilling planned.

• Initial gold Mineral Resource at Lady Herial may be reported in the next quarter, enabling open pit optimisation.

• Ongoing PFS for Baker and Foster to incorporate updated Mineral Resources and assess joint mining economics.

• Company to aggressively pursue alternative nickel processing options, including new concentrator construction or third-party agreements.

• Monitoring external factors impacting the Western Australian nickel sector and maintaining leverage to nickel price recovery.