TG Metals Strikes 50:50 Profit Split Deal With Medallion on 60kt Stockpiles
Medallion Metals strikes profit-share deal to process 60kt of neighbouring gold stockpiles
Medallion Metals (ASX:MM8) has executed a non-binding Term Sheet with TG Metals (ASX:TG6) for a proposed Ore Processing and Profit Share arrangement. The framework would see approximately 60,000 dry metric tonnes of gold-bearing stockpiles from TG Metals’ Van Uden Gold Project processed through Medallion’s Cosmic Boy Concentrator (CBC) at the Forrestania Gold Project. The proposed arrangement is designed to utilise available capacity at the CBC ahead of planned Ravensthorpe ore treatment, with no impact on the Ravensthorpe Gold Project (RGP) development schedule or targeted first production. If a binding agreement is executed, this processing feed would complement the recently announced Toll Processing Agreement (TPA) dated 15 July 2026, bringing total feed sources to approximately 260,000 tonnes.
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Breaking down the deal terms
The commercial structure establishes cost-recovery mechanics before profit sharing commences. Medallion first recoups its capital charge and operating costs, with the remaining pre-tax operating profit split equally between the two parties.
The proposed framework includes:
- Approximately 60,000 dry metric tonnes of Van Uden stockpiles to be processed.
- Medallion first recoups a capital charge plus agreed operating costs (recovery, transport, processing).
- Remaining pre-tax operating profit shared 50:50 with TG Metals.
- Provisional payments after each processing batch; final reconciliation on an open-book basis using actual costs, metallurgical performance and gold sales proceeds.
- Medallion responsible for recovering, transporting, processing and tailings management; TG Metals responsible for applicable royalties.
- Ore processed in discrete campaigns through the CBC.
| Deal Element | Detail | Investor Impact |
|---|---|---|
| Volume | 60,000 dry metric tonnes from Van Uden Gold Project | Additional mill utilisation without Medallion capital deployed on resource acquisition |
| Profit Split | 50:50 after capital charge and operating costs recovered | Downside protection for MM8 — costs covered before profit sharing commences |
| Development Schedule | No impact on Ravensthorpe Gold Project timeline | RGP remains on track for targeted first production |
| Feed Integration | Processed ahead of Ravensthorpe ore using available CBC capacity | Cashflow generation while main asset advances |
Why processing capacity matters for Medallion investors
A concentrator is a processing plant that takes low-grade ore and produces a higher-grade concentrate for further treatment. When a concentrator is not operating at full capacity, that spare throughput represents an underutilised asset that can generate revenue without additional capital investment.
A toll processing or profit-share model allows a miner with idle mill capacity to generate cashflow from third-party ore without owning the underlying resource. The host miner charges a fee (toll processing) or shares profits (as proposed in this arrangement) after recovering its costs. This structure allows the mill owner to monetise excess capacity while the resource owner gains access to processing infrastructure they may lack.
For Medallion investors, this represents a low-capital, cashflow-accretive strategy to sweat an existing asset while the primary Ravensthorpe project advances through development. The Van Uden stockpiles are positioned to fill the gap ahead of planned Ravensthorpe ore treatment, meaning there is no cannibalisation of the main production schedule. Instead, the CBC generates revenue during what would otherwise be underutilised operating periods.
The arrangement demonstrates how processing infrastructure can become a strategic asset in its own right, particularly in regions where multiple exploration projects exist but processing capacity is limited.
A catalyst for the Forrestania goldfield
The proposed arrangement positions Medallion as a potential district processing hub in a region that has seen limited modern gold exploration activity.
While the Forrestania region is an established goldfield, it has remained significantly underexplored for gold over the past 25 years, according to management. Establishing gold processing capability at Forrestania could unlock value across neighbouring tenements by providing explorers and junior miners with a viable pathway to monetise discoveries or stockpiled material that would otherwise remain stranded.
Paul Bennett, Managing Director
“This proposed arrangement with TG Metals makes commercial sense for both parties by allowing Medallion to utilise available capacity at the Cosmic Boy Concentrator while providing a neighbouring explorer with a pathway to monetise its gold stockpiles. While the Forrestania region is an established goldfield, it remains significantly underexplored for gold over the past 25 years. Establishing a gold processing capability at Forrestania places us in a unique position to be a catalyst to unlock value across the district. Our focus remains on execution and cashflow by bringing the Ravensthorpe Gold Project into production, and we will continue to pursue commercial opportunities that are accretive for our shareholders.”
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What happens next
The Term Sheet establishes a commercial framework but does not constitute a binding commitment. Several conditions must be satisfied before any processing commences.
- Term Sheet is non-binding and subject to customary conditions precedent, including due diligence and required approvals.
- Ore deliveries and processing are expected to commence following satisfaction of those conditions.
- No guarantee exists that the parties will execute a binding Ore Processing and Profit Share Agreement.
- If a binding agreement is executed, Medallion will announce material terms to the ASX.
Management has stated its focus remains on execution and cashflow by bringing Ravensthorpe into production, while pursuing accretive commercial opportunities such as the proposed TG Metals arrangement. The conditional nature of the Term Sheet means investors should not assume the arrangement will proceed to a binding agreement, but if executed, it would represent an additional revenue stream during the pre-Ravensthorpe production phase.
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