TG Metals Van Uden Scoping Study Shows 121% IRR and 12-Month Payback
Key Takeaways
- The Van Uden scoping study returns a pre-tax IRR of 121.7% and A$48.3M EBITDA from a proposed heap leach operation requiring only A$14.2M in upfront capital including contingency.
- Payback is modelled at 12.1 months pre-tax from first production, with post-tax project cashflow of A$22.8M over the mine's initial 3-year life.
- Column leach testwork on two completed samples delivered greater than 95% gold recovery, with the study conservatively adopting 90% for all financial modelling.
- The heap leach study targets only the laterite portion of the resource — the total Van Uden MRE stands at 7.93 Mt at 1.06 g/t Au for 270,300 oz, leaving substantial upside through transitional and primary material.
- Financing discussions for the approximately A$15M required are underway with third parties, though no certainty of a non-dilutive outcome has been confirmed.
Van Uden scoping study unlocks near-term cashflow pathway for TG Metals
A scoping study at TG Metals‘ (ASX: TG6) Van Uden Gold Project in Western Australia has delivered a pre-tax internal rate of return (IRR) of 121.7% and pre-tax free operating cashflow of A$48.3M from a proposed low-cost heap leach operation. The study outlines a compelling near-term development pathway built on low upfront capital of A$14.2M (including contingency), a payback period of approximately 12 months from first production, and near-surface laterite material requiring no drilling or blasting to mine. With an initial mine life of approximately 3 years from existing resources and active drilling underway to extend that runway, the project represents a potentially significant value inflection for shareholders.
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Scoping study at a glance — the numbers that matter
The Life of Mine financial summary, drawn from the full scoping study, is presented below.
| Metric | Value |
|---|---|
| Net Revenue (net of royalties) | A$83,180,970 |
| EBITDA | A$48,356,526 |
| Project Cashflow (pre-tax) | A$32,856,177 |
| Project Cashflow (post-tax) | A$22,769,316 |
| NPV8 (pre-tax) | A$26,837,195 |
| IRR (pre-tax) | 121.7% |
| Payback period (pre-tax, from first production) | 12.1 months |
| NPV (post-tax) | A$18,099,363 |
| IRR (post-tax) | 86.5% |
| Payback period (post-tax, from first production) | 14.0 months |
| Development Capex (incl. contingency) | A$14,179,761 |
The physical parameters underpinning these metrics are equally straightforward:
- 250,000 tonnes per annum heap leach operation
- Approximately 766,000 tonnes of ore mined over the mine life
- Average feed grade of 0.61 g/t Au
- Gold recovery of 90%
- Total recovered gold of approximately 13,630 oz
- Strip ratio of 0.6:1
The study uses a gold price assumption of US$4,400/oz at an AUD:USD exchange rate of 0.70. Investors should note these assumptions reflect a strongly priced gold environment and remain subject to commodity price and foreign exchange risk over the project’s life.
Why heap leaching laterite gold is a low-risk starting point
Heap leaching is a well-established, low-cost method of recovering gold from crushed ore. In simple terms, ore is stacked on lined pads, a cyanide solution is applied to the top, and it percolates through the material, dissolving gold as it goes. The gold-bearing solution is then collected and processed to extract the metal. Think of it as a slow but highly effective rinse cycle for gold-bearing rock.
Laterite gold deposits are particularly well-suited to this approach. Laterite is naturally weathered, near-surface material formed over millions of years of tropical weathering. It is porous, free-digging (meaning no drilling or blasting is required to extract it), and has demonstrated strong amenability to leaching. At Van Uden specifically, the project benefits from an extremely low strip ratio of 0.6:1, shallow pit depths of less than 15 metres, and the fact that the land has been previously disturbed by historic mining activity. These factors reduce both capital requirements and environmental complexity relative to a conventional hard-rock gold project.
What TG Metals’ own testwork showed
Column leach testwork was conducted on three composite samples drawn from across the Van Uden laterite deposit, each crushed to 25mm and agglomerated with cement at 15 kg/tonne. The results to date are as follows:
- LAT column (4m height, leach completed): greater than 95% gold recovery
- TAS column (4m height, leach completed): greater than 95% gold recovery
- DBS column (2m height, still under leach): 81.3% gold recovery to date
Because the DBS column remains under leach and residue analysis is yet to be completed, the study conservatively adopted a 90% recovery rate for all financial modelling. This conservative approach provides a degree of built-in buffer relative to the results already demonstrated by the two completed columns.
Beyond the base case — the upside story investors should track
The scoping study financials are built on the existing laterite Mineral Resource Estimate (MRE) alone. The announcement identifies four key expansion opportunities that could materially enhance project value over time:
- Resource expansion via infill and extensional drilling of existing laterite surface occurrences — drilling is currently underway to extend the defined resource base
- Inclusion of transitional material — an additional 62,400 oz of gold (approximately 1.85 Mt at 1.05 g/t Au) of transitional material is considered prospective for heap leach extraction and may be included in future development scenarios
- Increasing heap heights beyond the current assumed 4 metre design to lift production rates
- Parallel toll milling and/or ore purchase for the primary in-situ resource, potentially creating two simultaneous revenue streams from the one Van Uden project area
To frame the scale of the broader opportunity: the Van Uden deposit’s total MRE stands at 7.93 Mt at 1.06 g/t Au for 270,300 oz across all material types. The heap leach scoping study is effectively a Phase 1 development targeting the most accessible, lowest-cost portion of that resource.
CEO David Selfe on the bigger picture
David Selfe, Chief Executive Officer
“The Scoping Study results show an excellent on-site processing pathway to production that can generate significant free cashflow in comparison to our market capitalisation at a low upfront capex. This will in turn set up the VanUden Project for further expansion both on the heap leach proposal and into the Van Uden primary gold deposit. […]”
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What happens next — TG Metals’ near-term workplan
The announcement outlines a concrete set of workstreams already in motion:
- Expansion drilling is underway to define further laterite resources in proximity to the proposed heap leach processing facility
- Environmental surveys have been booked for 2026 spring
- Permitting documentation is being drafted for submission to regulatory authorities
- Geotechnical assessment of column leach residues is underway to inform heap pad design criteria
- Pre-Feasibility Study (PFS): the scoping study is intended to be upgraded to PFS level once design parameters and further resource definition are sufficiently advanced
- Financing discussions are progressing with third parties for project financing
On the financing front, investors should note that these discussions remain at an early stage. The source is clear that there is no certainty a non-dilutive funding solution will be concluded. Funding in the order of A$15 million will likely be required to achieve the outcomes indicated by the study, and it is possible that such funding may only be available on terms that are dilutive to, or otherwise affect the value of, TG Metals’ existing shares. Investors should not make any investment decisions based solely on the results of the scoping study.
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