Resources Top 5: Legacy Minerals shines with gold supported by solid momentum

Legacy Minerals has returned a robust scoping study for the Drake project as investors continue to move into gold.

Legacy Minerals has shone on a robust scoping study as gold is supported by solid momentum. Pic: Dan Kitwood/Getty Images

• A scoping study has outlined robust economics for the Drake gold project   

• Sunrise Energy Metals has risen on high-grade scandium assays from the Syerston project

• A mining licence has been received for the Goschen rare earths and mineral sands project

Your standout small cap resources stocks for Friday, April 11, 2025.

Legacy Minerals Holdings (ASX:LGM)

Fears that the US economy will experience lower growth and higher inflation coupled with the tariffs battle, geopolitical forces and turbulent markets have pushed investors into gold in a meaningful way.

Although the precious metal dropped below US$3000 earlier in the week, it has surged back past the key mark and even beyond $3200 (~A$5165).

In its latest report, the World Gold Council said although there was a risk that gold’s rally was unsustainable, the market was backed by solid momentum.

“The extent and speed of gold’s rally have drawn out comparisons to previous peaks. While there are headwinds that the gold market will naturally face in this environment, our analysis also suggests that current macroeconomic conditions are quite different from prior periods when the gold market reached previous highs,” analysts said in the report.

“The willingness to hold and reluctance to sell – given current extreme policy uncertainty – could generate real momentum,” WGC analysts said. 

“By historical standards, the current rally isn’t particularly large or long. And comparing the current rally to the recent 2011 and 2020 peaks highlights that, relatively speaking, fundamentals look more solid.”

Also moving forward on gold’s strength along with a stage one scoping study for the Drake project in northeast NSW that delivered economics described as "outstanding" is Legacy Minerals Holdings (ASX:LGM), which was up to 23.53% higher at 31.5c.

The study demonstrated robust economics and compelling resource growth opportunities with an NPV estimated at $303m, a whopping 206% above the 2020 PFS, and an IRR of 120%.

Conducted by Mining Plus, the study, which was completed in lieu of updating the 2020 PFS, followed LGM’s 2025 resource estimate that outlined 800,000oz gold equivalent from two gold-rich deposits and 35Moz silver equivalent from two silver-rich deposits.

Drake has potential to deliver an annual average of 35,230 ounces of gold at an 83% recovery rate.

The study estimates an all-in sustaining cost of $1709/oz over an initial five-and-a-half year mine life. 

At an assumed base case price of $4250/oz, well below the current spot price, Drake’s expected to generate strong free cashflows, averaging $59m pre-tax per annum. Using the current gold spot price, the pre tax NPV increases to $404m and the IRR is boosted to 151%. 

Legacy believes the project has significant upside, with around 24 million ounces of silver and 450,000oz of gold defined in the 2025 MRE not included in the stage one study. These will be part of a potential stage two study.

“This scoping study confirms the outstanding and compelling opportunity of the Drake Project,” LGM’s CEO and managing director Christopher Byrne said.

“With the new 2025 mineral resource estimate now completed and considering the established infrastructure at Drake, this Stage 1 Scoping Study demonstrates the clear value of the project and its potential upside through future resource growth and discovery.”

From here, Legacy will work on future studies to evaluate additional ounces excluded from this study, and continue exploration activities targeting resource expansion and discovery.

Sunrise Energy Metals (ASX:SRL)

Boosted by high-grade assays of the critical mineral scandium from the Syerston project in central NSW, Sunrise Energy Metals has jumped to a daily high of 47.2c, an increase of almost 54.8% on the previous close.

Assays of drill pulps from 1997 that were not previously assayed for scandium returned up to 6m at 553ppm Sc from 4m, including 2m at 760ppm from 8m, and 12m at 458ppm from 12m.

SRL is moving quickly to validate these results and is planning a new drilling campaign to test the step-out targets aimed at expanding the high-grade zones.

This work will also provide additional data for input into the updates of the Syerston mineral resource estimate and project feasibility study for the development of a dedicated scandium mine and processing plant at Syerston. 

Syerston’s current resource comprises 60.3Mt at 390ppm Sc for about 23,500 tonnes of contained Sc at a 300ppm Sc cut-off grade.

“These assay results are highly encouraging, identifying further high-grade zones of scandium within the Syerston deposit,” Sunrise Energy Metals MD and CEO Sam Riggall said.

“The results will aid our technical team in planning the upcoming scandium drilling program aimed at confirming new areas of high-grade scandium for eventual input into an updated MRE and an updated project feasibility study.

“The recently updated Syerston MRE highlights the scale and quantity of our scandium asset as we continue to progress the update of the project feasibility study and accelerate our engagement with potential scandium end users.”

A new scandium RC drilling program has been finalised and is expected to include 5,000 drill metres over 125 holes to an average depth of 40m, targeting areas of high-grade Sc confirmed by historical drilling and the recently returned assays.

Parkes-based drilling contractor Resolution Drilling has been engaged for this work and the program is due to start upon receiving the necessary approvals from the NSW Resources Regulator.

The drilling will focus on expanding the tonnage within the high-grade Sc areas of the deposit. A number of undrilled areas are on the periphery of the dunite intrusion where the high-grade Sc appears to be concentrated.

The Syerston project near Fifield in central NSW hosts one of the world’s largest and highest-grade scandium deposits. 

A feasibility study for the project, which was completed in August 2016 supported by extensive piloting, metallurgical testwork and engineering, is being updated.

VHM (ASX:VHM)

VHM has moved closer towards pressing the go button at its flagship Goschen rare earths and mineral sands project in northwest Victoria after being awarded the mining licence, allowing the company to mine the land, explore for minerals and construct facilities related to the mining operation.

With an endorsed Environment Effects Statement under its belt, VHM Limited (ASX:VHM) is progressing all remaining secondary approvals to construct, operate and close the project.

Further supporting the company’s intentions was the recent award of a three-year extension to its Major Project Status, allowing it to receive extra support from the Major Projects Facilitation Agency and benefit from a single entry point for government approvals.

Goschen has an ore reserve of 210 million tonnes within a resource of 892Mt at 3% total heavy minerals that is also rich in rare earths.

VHM envisions an initial 1.5Mtpa operation using a modular plant, expanding to 5Mtpa two years later.

“The approval of the Goschen Mining Licence is the latest significant milestone for VHM and further de-risks the project as we target a final investment decision,” chief executive officer Ron Douglas said. 

“For shareholders of the company and potential financiers, this is a critical approval in the ongoing process of advancing Goschen through development and into production. 

“Goschen has the potential to become an important Victorian supplier of critical minerals and we thank Resources Victoria for recognising the opportunity the Goschen project represents for the state.”

VHM, which is targeting to make a final investment decision on Goschen in 2025 to enable first production in late 2026, has reached 24c, a lift of 6.67% on the previous close.

Jade Gas Holdings (ASX:JGH)

Significant progress has been made by Jade Gas Holdings (ASX:JGH) in its strategy to provide a new energy source in the power-hungry South Gobi region of Mongolia, just across the border from the major market of northern China.

A second production well at the Red Lake gas field in the South Gobi has confirmed what KGH says is outstanding gas potential and this has been welcomed by investors, with shares 39.4% higher to 4.6c.

Upon completing horizontal drilling, the second lateral coal seam well in Mongolia, more than 800m of net coal reservoir was intersected, resulting in a combined 1,500m of gassy coal.

Total gas measured in well 2 by the gas detector and observed in the drilling mud encouragingly indicated higher gas levels than measured in the first production well.

Monitoring of mud gas was undertaken during drilling confirming that the target coal seam had better than expected gas shows based on the desorbed gas content in offset core wells Red Lake 7, 15 and 16.

Both wells are now being equipped for production and are expected to be online and producing within the next three to four weeks.

“Production drilling results confirm our confidence in the Red Lake Gas Field being a future world-class gas producer. We will complete these first two production wells and bring them online as soon as possible. We then eagerly await confirmation of gas flow rates,” Jade executive chairman Dennis Morton said:

"The Tavan Tolgoi basin is within an area with high energy demand for electricity, fuel for engines and as a base load energy supply to underpin intermittent renewables. This is a wonderful situation for the company as all gas sales options target high energy replacement costs.”

Activities will now focus on completion of these first two wells and production testing. After the pumps and production equipment are installed, water and gas flow will be analysed and used to continue to refine the planned development operation of the TTCBM field.

Negotiations are underway to provide near-term commercialisation opportunities via CNG production capabilities to capture value from the early gas flow.

Regener8 Resources (ASX:R8R)

(Up on no news)

Regener8 has a diverse and future facing exploration project portfolio consisting of three projects across prolific resource regions of Australia.

The spotlight has landed on the North Achilles Project in the southern part of the base and precious metals-rich Cobar Basin of central NSW.

This is due to the project being immediately beside and along trend to the Achilles discovery of Australian Gold and Copper (ASX:AGC) which returned up to 5m at 16.9g/t gold, 1,667g/t silver, 0.4% copper and 15% lead+zinc.

An emerging copper-gold search space in the western section of the broader Achilles Shear recognised by neighbouring AGC provides encouragement for similar mineralisation to be hosted within North Achilles.

Regional magnetic datasets have been re-processed by geophysical consultants Southern Geoscience, confirming the structurally prospective setting of the project and providing a target area for initial exploration.

R8R has on-ground and geophysical exploration planned to firm up potential drill targets.

“We continue to be encouraged by our exploration neighbour (AGC) and their ongoing results and understanding of the area, on the back of the standout Achilles discovery,” Regener8 managing director Stephen Foley said.

The company, which has been up 56.25% to a daily high of 12.5c,  also has the East Ponton critical minerals and gold project east of Kalgoorlie in WA along with the Kookynie gold project north of Kalgoorlie.

This article does not constitute financial product advice. You should consider obtaining independent financial advice before making any financial decisions. While Legacy Minerals and VHM are Stockhead advertisers, they did not sponsor this article.

Originally published as Resources Top 5: Legacy Minerals shines with gold supported by solid momentum