Forrestania Resources Locks in Ore Supply and Mining Service Agreements
Key Takeaways
- Forrestania Resources has signed an Ore Purchase Agreement giving it the right to buy up to 2 million tonnes of ore from MEGA Resources over 24 months, with first ore coming from existing Taipan open pit stockpiles.
- Forrestania retains title to all delivered ore and ownership of recovered gold — this is a direct production pathway, not a toll-processing arrangement where the metal is returned to the supplier.
- Processing will be conducted at either Lake Johnston or Edna May at Forrestania's election, putting two established facilities to work while the company's own deposit pipeline matures.
- A separate five-year Master Services Agreement establishes MEGA as a preferred contractor across FRS's full Western Australian asset portfolio, with no minimum volume commitment and rapid-deployment work orders.
- The $23 million capital raise completed in August 2026 provides the balance sheet foundation to fund processing campaigns and contractor mobilisation under both agreements.
Forrestania locks in two strategic agreements to feed its processing hubs
Forrestania Resources Limited (ASX: FRS) has executed two long-term commercial agreements with MEGA Resources Pty Ltd, marking a concrete step forward in the company’s processing hub and restart readiness strategy. The two agreements, announced on 14 September 2026, are an Ore Purchase Agreement providing the right to purchase up to 2 million tonnes of ore over 24 months, and a five-year Master Services Agreement establishing a preferred framework for open pit mining and related services across FRS’s asset portfolio. MEGA Resources operates the Taipan open pit, and first ore under the arrangement will come from existing stockpiles at that site, signalling near-term activity rather than a distant horizon.
When big ASX news breaks, our subscribers know first
What the two agreements deliver for Forrestania
Ore Purchase Agreement — up to 2 million tonnes over 24 months
The Ore Purchase Agreement sets out clear commercial terms for the supply and processing of third-party ore. Key features include:
- Term: 24 months
- Maximum volume: Up to 2 million tonnes (FRS has the right to purchase this volume, not an obligation to take it)
- Campaign parcel sizes: 50,000 to 150,000 tonnes per parcel, subject to agreed grade, metallurgical, and acceptance criteria
- Processing facility: Lake Johnston or Edna May, at Forrestania’s election
- Title: Forrestania acquires title to delivered ore and retains ownership of recovered gold and associated minerals
- Pricing formula: Baseline of $155/tonne at an ore grade of 1.43g/t and 91% processing recovery
The pricing is formula-based and linked to grade and recovery. Total revenue will depend on actual throughput volumes and ore grades delivered, neither of which is locked in at this stage.
Master Services Agreement — five-year preferred contractor framework
The Master Services Agreement establishes a standing contractual framework under which MEGA may undertake future mining and associated works for Forrestania. Critically, this agreement does not commit FRS to any minimum work volume. Instead, it creates a rapid-deployment mechanism through project-specific work orders, avoiding the need for full contract renegotiation each time a new project arises.
The six service categories contemplated under the agreement are:
- Open pit mining operations
- Drill and blast services
- Ore and waste movement
- Site establishment and mobilisation activities
- Mining support services
- Other project-specific mining requirements as requested by Forrestania from time to time
The five-year term spans Forrestania’s full asset portfolio, covering Lake Johnston, Edna May, and other regional opportunities across Western Australia.
| Agreement | Key Terms |
|---|---|
| Ore Purchase Agreement | 24-month term; up to 2 million tonnes; campaign parcels of 50,000–150,000 tonnes; pricing at $155/tonne baseline (1.43g/t, 91% recovery); FRS retains title to ore and recovered gold; processing at Lake Johnston or Edna May at FRS’s election |
| Master Services Agreement | Five-year term; preferred contractor framework; no minimum work volume commitment; project-specific work orders for rapid deployment; covers open pit mining, drill and blast, ore and waste movement, site establishment, mining support, and other project requirements; spans full FRS asset portfolio |
Understanding the processing hub strategy — why third-party ore matters
A processing hub model works by running a company’s existing mill or plant infrastructure on ore sourced from external parties, generating revenue without requiring the host company to mine its own ore first. For Forrestania, this is strategically attractive right now because the company already holds two established processing facilities at Lake Johnston and Edna May, representing significant sunk capital that can be put to work while the company’s own mine development pipeline advances.
What makes this arrangement particularly noteworthy for investors is that Forrestania retains title to the delivered ore and ownership of the recovered gold and associated minerals. This is not a toll-processing arrangement where FRS charges a fee and hands the gold back. Forrestania keeps the gold, making this a direct production pathway rather than a service revenue stream. The processing hub model essentially allows the company to generate production output by leveraging infrastructure it already owns, without waiting for its own deposits to be brought into production.
Forrestania’s $23M capital raise, completed in August 2026, provided the balance sheet foundation that makes executing agreements like these commercially credible, giving the company the runway to fund processing campaigns and contractor mobilisation without reliance on external debt.
The next major ASX story will hit our subscribers first
What management says and what comes next
David Geraghty, Executive Chairman
“The execution of both the Ore Purchase Agreement and Master Services Agreement with MEGA Resources represents another important step in advancing Forrestania’s processing hub strategy and restart readiness initiatives. First ore to be sourced under the agreement will come from current stockpiles at the Taipan open pit operating by MEGA Resources. The agreement provides a commercial framework to source and process third-party ore through our Lake Johnston and Edna May facilities, whilst the master services agreement establishes a long-term strategic relationship with an experienced mining contractor and provides Forrestania with flexibility and optionality as we progress future mining developments across our portfolio.”
Kiran Visireddy, Director, MEGA Resources
“MEGA is pleased to formalise our relationship with Forrestania through both the Ore Purchase Agreement and Master Services Agreement. These agreements create a framework for a long-term partnership that combines MEGA’s mining and ore supply capabilities with Forrestania’s established processing infrastructure. We look forward to building our relationship with the Forrestania team and delivering safe, efficient and commercially successful outcomes for both companies.”
The immediate next steps are clear from the announcement. First ore will be sourced from current stockpiles at the Taipan open pit, with processing campaigns to be conducted at either Lake Johnston or Edna May. Longer term, the Master Services Agreement provides the framework to support future mining activities at both processing hub sites and across other regional opportunities as they emerge. Together, the two agreements represent the continued build-out of FRS’s stated strategy: developing a scalable Western Australian gold production platform through two complementary processing hubs.
The high-grade gold results at Ada Ann, released in August 2026, illustrate the organic deposit pipeline that sits behind the processing hub strategy, with FRS’s own mineralisation representing the longer-term feed source that the Lake Johnston and Edna May facilities are being readied to receive.
Don’t Miss the Next ASX Gold Opportunity
Big News Blast delivers FREE breaking ASX mining and energy alerts to your inbox within minutes of release, complete with in-depth analysis already done for you. Over 30,000 active subscribers trust it to stay ahead of market-moving news. Click the “Free Alerts” button at Discovery Alert to ensure the next major gold announcement lands in your inbox the moment it breaks.