ASX-listed gold producer Meeka Metals has managed to grow its cash balance to more than $50 million despite spending a quarter’s worth of work navigating heavy rainfall and switching in ore sources at its Murchison gold project in Western Australia.
Whilst gold production for the March quarter dipped to 6083 ounces, the company’s cash and equivalents swelled, despite $15.8 million of one-off capital investments linked to new mines and infrastructure.
The company says the lower production was due to an increased reliance on processing lower-grade stockpiles after heavy rainfall, which reduced productivity and delayed access to higher-grade ores.
A considerable bright spot was achieved on the operational front, with a 37 per cent jump in processing throughput at the mill to 123,000 tonnes for the quarter.
During the period, Meeka rang the till on sales of 8,460 ounces of gold at an impressive average price of $6732 per ounce, generating revenue of almost $57 million and a mine operating cash flow of $25.8 million.
Meeka’s growth spending included an additional $9.4 million to strip the final stage one open pit at Turnberry North and another $4.5 million for underground equipment and mine development.
Throughput in the June quarter is forecast to be consistent with March as oxide ore continues to provide the bulk of the process plant blend. However, a lift is expected in the September quarter as higher-grade fresh ore from underground increasingly makes up a larger proportion of the mill feed.
The company says it remains unhedged and carries no debt beyond standard mining equipment finance, offering plenty of exposure to a healthy upside in gold prices.
Meeka Metals managing director Tim Davidson said: “It was a frustrating quarter from a production perspective, but we did see significant improvement in process plant throughput. We expect this to continue as the mill feed transitions to increasingly fresh ore from underground over the coming quarters, which will also deliver an increase in head grade.”
Meeka Metals’ flagship Murchison gold project near Meekatharra hosts a growing high-grade resource of 1.2 million ounces of open-pit and underground material running a handy three grams per tonne (g/t) gold.
Since its first gold pour last July, the project has quickly settled into steady production, while its resource base continues to grow steadily.
The company says it is now accelerating its transition to higher-grade underground ore sources. Development at the Andy Well underground mine is progressing in parallel with preparations for a second underground mine at Turnberry.
In addition, process plant upgrade works have begun, with the installation of a new crushing circuit, wash plant and ore sorter. Commissioning is targeted for the September quarter, which management expects will unlock additional capacity and a further uplift in ounces.
While the weather might have put a dampener on the March quarter’s production figures, Meeka’s balance sheet appears to have weathered the storm just fine.
With its cash reserves topped up and a clear pivot to higher-grade underground ore at both Andy Well and Turnberry, the company seems to be laying the groundwork for a more productive back end to 2026.
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By Andrew Todd
