Ten Bagger: Gold companies with infrastructure taking a front seat in the boom

Gold companies are repurposing infrastructure from the nickel industry in a bid to get into production quicker and cheaper.

Gold juniors are on the rise, but those with infrastructure could have a leg up on their peers. Pic: Supplied/Stockhead

Welcome to Ten-Bagger, where Lowell Resources Fund chief investment officer John Forwood gives us his take on a sector of the ASX resources market full of value.

This month, John tells us why infrastructure is key for junior gold stocks.

The recent RIU Explorers Conference in Fremantle was a victory lap of sorts for the gold sector, as record prices saw precious metals stocks take back the best in show crown from battery metals hopefuls.

At US$2943/oz on Thursday morning and Trump's diplomatic obstinacy continuing to cause geopolitical ructions, the metal continues to see safe haven investment with few signs an environment so fertile for bullion will recede from view.

But not every gold stock will be a winner.

Lowell Resources Fund (ASX:LRT) chief investment officer John Forwood told Stockhead gold miners with existing infrastructure are off to a head start when it comes to realising value from the bull market.

While gold plants are expensive to build and timely to permit, some miners are short-circuiting the process by leveraging spent infrastructure from other, less fancied commodities.

"Last year was terrible for battery minerals, as a general rule and that hasn't really changed in the first part of 2025, but gold has continued to outperform in US dollar terms and in Aussie dollar terms," he said on the sidelines of the forum.

"So what we've seen is WA mining companies in particular being very nimble and doing deals and repurposing. The best examples are old nickel plants that have come to the end of their nickel mine lives, because they've naturally exhausted their reserves or because of price. Those plants can be repurposed to treat gold.

"Generally the capex to do that can be relatively modest."

Opportunities abound

Two of the key players who are taking that route at the Ashok Parekh-chaired Horizon Minerals (ASX:HRZ), which completed a merger for Poseidon Nickel and its 2Mtpa Black Swan mill near Kalgoorlie this week, and Ravensthorpe focused Medallion Metals (ASX:MM8), which is conducting due diligence over IGO's Cosmic Boy mill at Forrestania.

"Those two plants are probably 12 to 18 months away potentially from being transformed into producing gold," Forwood said.

The other benefits of these plants is they tend to also bring with them permits, including for tailings, and granted tenements prospective for gold that have gone underexplored because of the commodity focus of previous investors.

"I know at Forrestania, IGO has a very large package of leases there, and Medallion is negotiating to acquire the gold rights on those leases. There's something around 300,000oz of gold sitting on those leases," he added.

"Beyond that, because there's been no gold plant in that area there's another potentially up to 600,000oz of gold held by third parties which haven't got a home. So if you transform that nickel plant into a gold plant, it's an obvious opportunity to bring some of that third party ore through the through the plant, and that's never been an option in the past."

Idled gold mills could present an opportunity for smaller regional players, too.

While gold prices are at record highs, some plants remain surplus to requirements for their owners.

Westgold Resources (ASX:WGX) is known to have been shopping its Lakewood mill near Kalgoorlie, at the same time as companies like Horizon and Black Cat Syndicate (ASX:BC8) are tolling ore at plants like Norton's Paddington to get up and running, while smaller mills like TSX-listed Monument Minerals' Burnakura in the Mid West could yet be refired to capture the benefit of stronger gold prices.

Gold medal stocks

There are two stocks really shining for Forwood this month in the gold space.

One is the aforementioned Medallion, which has 1.6Moz gold equivalent at the Ravensthorpe gold and copper project.

A recent $6.5m raising will carry MM8 to a BFS and final investment decision later this year.

"We've been in Medallion for a while. We've participated in 3 capital raisings and the most recent one was at 10 cents. Now it's trading at 16c," Forwood said.

He thinks there's more upside from there for the $63 million capped junior, which is up ~165% in the past six months, and would generate $637m of pre-tax free cash flow at sub-spot prices of $4000/oz gold and $6.15/lb copper based on a recent study on processing Ravensthorpe's gold through the Cosmic Boy mill.

The other junior Forwood really likes the look of is Nexus Minerals (ASX:NXM).

It doesn't have its own infrastructure, but its Crusader-Templar project sits just 40km from Northern Star Resources' (ASX:NST) Carosue Dam gold project and processing plant.

The explorer briefly surged in late 2021 before disappointing exploration results brought it back to Earth. But $30m capped Nexus is again drawing investor interest, this time from a lower base.

"A few years ago there was talk of that being a million ounces, then they came out with the initial resource of ~300,000oz," Forwood said.

"But all of that, if they were able to put it through Carosue Dam, would be mineable and make a lot of money for Nexus.

"There's a subset of that, 80,000oz, which can travel a lot further."

But the green sky is in a large tract of greenstone south of Northern Star's Porphyry mining centre that has never been drilled.

"Nexus are drilling that at the moment and getting some great aircore results," Forwood said.

"They've got numerous targets so that's really very exciting, I think that's probably one of the top picks that we've got in terms of both exploration but also near term toll treatment development."

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.

Originally published as Ten Bagger: Gold companies with infrastructure taking a front seat in the boom