Medallion fields plenty of interest to back the Ravensthorpe-Forrestania development

Medallion receives interest from potential offtake partners to finance its Ravensthorpe-Forrestania gold development
Offtake and funding initiatives will be progressed rapidly in conjunction with the advancement of the proposed acquisition
The company is seeking independent advice for both the offtake and funding elements of each proposal

Special report: Medallion Metals has attracted extraordinary demand for its proposed copper-gold concentrate from the proposed Ravensthorpe-Forrestania development in WA after receiving indicative offers from multiple parties.

Of those proposals, some contain offers of development funding linked to the offtake.

Medallion Metals (ASX:MM8) says the indicative offtake terms are superior to those modelled in the scoping study released last year, providing confidence in the attractiveness of the product in a market currently in deficit.

The Ravensthorpe gold project is expected to produce a high-value concentrate grading 19-20% Cu and ~30-40g/t Au, with no deleterious elements.

It comes at a time of sky-high gold prices and a major collapse in treatment and refining charges from copper smelters, reflecting a shortage of high-quality concentrates for a growing refining market. It’s a perfect storm for demand in the product Medallion intends to sell.

MM8 believes the current market conditions have important implications for the company when considering modifications to the Cosmic Boy process infrastructure to enable treatment of Ravensthorpe material.

Copper concentrate grades of below 19.5% Cu appear readily saleable without incurring onerous penalties/deductions.

This carries significant ramifications for target grind size, grinding power and the requirement or otherwise for re-grinding.

This development strengthens Medallion’s strategy to repurpose the Cosmic Boy nickel concentrator for copper-gold concentrate production. The concentrate market’s flexibility is likely to be positive in terms of both time and cost associated with Cosmic Boy modifications and then its operation.

Deal to acquire Forrestania

These offtake and funding discussions follow the exclusivity agreement entered into with IGO (ASX:IGO) in August 2024 over the Cosmic Boy mill.

That agreement granted Medallion a period of exclusivity in which to negotiate a proposed acquisition of certain assets at the mothballed Forrestania Nickel Operation (FNO), including the Cosmic Boy Process Plant and associated infrastructure in WA’s Wheatbelt.

The process remains on track, with the Company’s aim being to reach binding status within the 9-month exclusivity period, ending in May 2025.

Capital to underwrite development

Medallion managing director Paul Bennett said the strong level of interest from potential off-take partners is further endorsement of the company’s sulphide development strategy.

“Not only does copper enhance the project’s already attractive economics, the demand for the concentrate product potentially provides access to a funding source capable of establishing the foundation capital piece to underwrite the proposed development.”

Medallion is reviewing the proposals with independent advice on both offtake and funding terms.

Subject to reaching binding documents in relation to the proposed transaction to acquire Forrestania, the company will shortlist the proposals and then seek to progress to an offer capable of acceptance.

Medallion may also consider funding alternatives that are not linked to offtake.

It shows the depth of corporate interest in the RGP, fully funded to an FID after an oversubscribed $6.5 million raising early this year that saw $380m capped gold producer Alkane Resources (ASX:ALK) emerge as a significant shareholder and Lion Selection Group (ASX:LSX) come on board as a cornerstone backer.

This article was developed in collaboration with Medallion Metals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.