WAU (previous name BMG) - WA Gold Scoping Study, and drilling continues

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 29,123,810 WAU Shares and the company’s staff own 10,476,191 WAU Shares at the time of publishing this article. The Company has been engaged by WAU to share our commentary on the progress of our Investment in WAU over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

One of our WA gold Investments just announced a Scoping Study saying it can quickly build a small scale gold mine for just $8M that will deliver up to A$297M pre tax cashflow.

With an NPV of up to $253M pre tax.

That’s a 33x return on pre production investment.

And it's gold in Western Australia (WA) - the epicentre of gold and gold mining, on a granted Mining Lease.

Smart move while gold is at historical highs... build fast, produce gold, and sell gold ASAP.

(the study was based on a gold price of A$6,000/oz, compared to a spot price of A$6,700/oz).

Here’s the gold price in US dollars:

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

The company also just changed its name and stock code this morning.

It matches a little better where the company is operating and what it does...

In fact it is now extremely obvious.

... and essentially shouts a strong commitment to build this thing.

(a “burn the boats” naming strategy?)

BMG Resources (ASX: BMG) is now known as: WA Gold (ASX:WAU)

This morning $44M capped WAU released a Scoping Study for its WA gold asset.

The study shows how the asset can be put into production relatively quickly (it sits on a granted Mining Lease), and very cheaply:

For a low pre production capital requirement of $8M, WAU could deliver an NPV of A$205 – A$253 million (pre-tax).

That’s a 33x return on pre-production investment and up to 526% IRR.

(Not everyday an asset has a Capex to NPV ratio that high)

(source)

Stage 1 Mine Forecast Total Net Cashflow is approximately A$243 – A$297M.

The Scoping Study today is only based around mining the existing, higher confidence indicated resources - just 114k ounces (~22%) of the total 518K ounce JORC resource estimate the project has.

(source)

So that $253M NPV number is only based on a fraction of the potential future resource size, and WAU continues to drill.

(Management incentive packages were set based on a 1M ounce resource estimate target a few months ago, so we think that could be where things might be heading... no guarantees of course) (source)

WAU’s assets sit in the famous WA “Northern Goldfields” gold region hosting many, multi-million ounce gold deposits.

(and there’s a famous billionaire prospector who just lobbed in a plan for one company in the region - more on that below)

(source)

WAU is currently ~1,100m through a 10,000m drilling program - mainly targeting extensions at depth to its existing resource.

(these drill results should start coming in soon)

WAU’s working geological theory is that its project could host a Never Never style ductile gold system - where the grades of its resource get bigger as drilling goes deeper.

Never Never was the discovery Spartan Resources made in mid 2024 which led to a ~$2.5BN takeover by Ramelius Resources. (source)

It’s still early days for WAU, but with this program, WAU is lobbing a few holes down to depths of ~500m - IF any of those come in then it could make that exploration theory a lot more real.

Of course, this is mining exploration - there’s no guarantee that WAU will have success here - Never Never was a very lucky discovery and those are very hard to replicate.

(source)(source)

The previous drill results made us do a double-take - we think anything remotely close to those old results could bring a lot more market interest into WAU (beyond today’s Scoping Study):

(especially that first one 57.5m at 5.73g/t gold from just 80m)

(source)

WAU is capped at circa $45M, and held $5.4M cash at last count - so it’s got the capital structure and balance sheet to cover the CAPEX funds entirely itself.

And it sits on a granted Mining Lease, with access to regional infrastructure, and close to a processing plant.

That is a big part of the reason why CAPEX is so low.

WAU already has a non-binding MoU with one of the big regional mill owners - Wiluna - to toll treat its ore (signed back in July 2025).

(source)

Wiluna is the same company plotting a ~$400M return to the ASX AND whose directors said its future would be about “growth initiatives, and/or corporate transactions”...

(source)(source)

And just yesterday, the same company that billionaire Mark Creasy looks to be trying to take control of:

(source)

IF Creasy takes control or the company hits the ASX again, we think interest in companies like WAU - natural ore sources for mills in the area will increase a lot.

Especially with gold at ~A$7,530 per ounce - and “fast to production” strategies working right now, especially in WA.

There’s a recent precedent here

One ASX listed company, New Murchison Gold, started mining its ~280k ounce resource estimate and is selling ore to $7BN Westgold Resources for processing at their plant ~36km away.

(WAU’s current JORC resource estimate is almost 2x that number)

In October, from ore sales alone, New Murchison generated ~$41.6M in revenue.

New Murchison today is capped at $511M.

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

WAU’s Initial Production Target is approximately 114,000 ounces of gold (~90% classified as Indicated Resources).

That is part of a broader 518k ounce JORC resource estimate - which as we said earlier, we think can grow with the current drilling WAU is doing.

Here is a quick overview of why we like WAU’s 518K ounce (for now) Abercromby project:

• Existing High-Grade Resource: The project already hosts a 518k ounce gold resource, which provides a strong valuation floor.
• Expansion Potential: There is significant "blue sky" upside, with management targeting a resource upgrade to over 1M ounces through upcoming drilling.
• "Never Never" Discovery Potential: Geologists believe the project could host a high-grade, ductile gold structure similar to the "Never Never" discovery (Spartan Resources), which saw a multi-billion dollar valuation surge.
• Toll Treatment Strategy: WAU has a non-binding MoU with a nearby mill (Wiluna Mining). This allows for a low-capex, fast-track pathway to production without the need to build a $100M+ processing plant.
• Granted Mining Leases: Unlike many junior explorers, the core resource is already on granted mining leases, significantly reducing the regulatory timeline to start production.
• NPV of $205-253M pre tax: This NPV comes from just an initial $8M start up capital requirement making it a much easier funding hurdle to overcome than most explorers/developers require.
  
  
• Tier-1 Location: Situated in the "Northern Goldfields" of Western Australia, it is surrounded by major mines and infrastructure owned by companies like Northern Star and Genesis Minerals.

(source)

(source)

WAU’s project sits within trucking distance of two mills

The closest mill is the one we mentioned earlier in today’s article ~20km away - Wiluna Mining.

Just yesterday, we saw the below article on Wiluna - billionaire Mark Creasy looking like he is trying to take control of the company with a $105M capital raise / restructure:

(Source)

If Mark Creasy is showing an interest in this part of WA then the market will definitely take an interest in what he is up to.

Creasy’s first big win came from picking up ground in the Yandal belt (where WAU and Wiluna is).

Creasy’s first big deal was in 1991 when he sold the Bronzewing and Jundee assets for ~$120M. (source)

Both of those assets are being operated by $33BN Northern Star today.

Here is where Jundee and Bronzewing sit relative to WAU and Wiluna:

(source)

So Creasy is playing in a part of WA he would know like the back of his hand.

IF Creasy takes control AND/OR the Wiluna is back on the ASX we think it will bring a lot of eyeballs to companies like WAU nearby.

Especially as a potential ore source for a big hungry mill like Wiluna’s.

Wiluna Mining has signed an MoU with WAU to toll treat its 518k ounce resource and any more gold it finds. (source)

(source)

What’s to come for WAU

So in the coming weeks, beyond today’s Scoping on WAU’s Abercromby project alone, we will see:

1. Drilling results - drilling in and around the current resource, where grades look like they are increasing at depth. IF we see a few solid hits at depth, it could be game on for the “Never Never” ductile gold deposit theory WAU has for the project.
2. AND, an update on things happening at Wiluna (will Creasy take control?)

Delivering on WAU’s strategy is a team that is incentivised to grow/develop the asset:

• CEO Ben Pollard - who just purchased $500k in stock at 2c (exercising 25M options at 2c) and is incentivised to grow the JORC resource estimate to 1M ounces. (source) (source)
• New appointment this week (Gareth McArthur) - whose performance rights are heavily based around “Commencement by the Company of mining operations at the Abercromby Gold Project by 31 December 2027”. (source).

While all of that happens, things are heating up for WAU’s other project in WA (another one of the reasons we Invested in WAU).

WAU’s other asset is next door to the $1.6BN capped Minerals 260.

World’s largest precious metals royalty and streaming company has sidled up next door to WAU

The world’s leading gold-focused royalty and streaming company, the $77BN Franco Nevada, has done a $220M financing deal with WAU’s neighbour, ASX listed Minerals 260.

(source)

The $220M coming Minerals 260’s way is under a Strategic Funding Agreement that will see Franco-Nevada:

• pay $170M in exchange for increasing its total royalty over the project to 2.45% (currently a 1.00% royalty exists over certain tenements)
• invest $50M in direct equity into Minerals 260.

This is the same Minerals 260 that, in its own announcements is interpreting mineralisation at its 4.5Moz gold deposit is trending directly into WAU’s ground:

(source)

In fact, Minerals 260’s announcement from the 16th of February returned a few more strong assays on that western border AND showed the next few planned holes were edging closer to the boundary with WAU:

(source)

Coming back to that two part Franco Nevada deal - while it invested $50M directly into Minerals 260, the standout to us was the $170M royalty deal.

We see that royalty deal as explicit backing from Franco Nevada, to get Minerals 260’s project developed and into production (so they can see a return on that $170M royalty).

The big kicker for our Investment WAU is that now, Minerals 260 has a major shareholder (and royalty holder) who will:

1. Want to see the project get developed and put into production first and foremost, AND
2. Wants Minerals 260 to go as hard as possible on exploration to make the project produce gold well beyond its existing 4.5M ounce gold resource.

This deal reminds us of a podcast we listened to where Pierre Lassonde (mining royalty & a Franco Nevada founder) talked about how they turned a $2M royalty into over $1BN.

You can watch the full interview below.

Pierre tells the story of how the first royalty Franco Nevada did was on Barrick’s Goldstrike deposit in Nevada, USA.

When that deal was done initially, the deposit was small BUT had plenty of exploration upside.

Decades later, with a lot of exploration luck, it is the centrepiece asset of the $95BN Barrick’s gold business.

(Barrick picked up the Goldstrike asset in 1986 when it had 680,000 ounces of gold. 25+ years on and that project has produced over 44M ounces of gold.)

Here is Pierre Lassonde talking about the experience here:

(Watch Video - this link takes you to the section where he talks about the Goldstrike story)

Our view is that now with Franco Nevada involved, Minerals 260 will be encouraged to turn over every single rock possible in and around its deposit.

Which we think makes WAU’s ground surrounding Minerals 260’s deposit a lot more valuable now.

(source)

More on WAU’s current drilling at Abercromby

WAU is drilling in and around the existing 518K ounce gold resource, where some of the previous holes have had some seriously strong hits:

(source)

Importantly though, WAU confirmed the diamond holes would test for extensions at depth - which IF they come in could add more weight to the whole “Never Never” style ductile gold exploration upside on the project.

For some context, “Never Never” was the 2.1M ounce discovery Spartan Resources made that led to its $2.5BN takeover only 2.5 years after discovery.

It may take a few drilling programs to find out, but we should definitely know a lot more about that potential after this round of drilling is over.

Here is where WAU is planning to drill relative to its resource - what we will be looking out for is if the gold extends at depth:

(source)

WAU also confirmed that some of the drill program would be going into testing extensions to the south of the existing resource.

So we could see WAU add size/scale to its already large resource after this round of drilling is done.

Here is an image we marked up showing where those targets to the south sit:

(source)

10 reasons why we Invested in WAU

We put out our initiation note on the 3rd of February.

(at the time WAU was called WAU - so if you click the link you may see WAU mentioned a lot - we have changed to WAU below to reflect current code)

Here are the 10 reasons why we Invested in WAU from that note:

1. WAU has an existing 518K ounce gold resource
2. Blue sky exploration upside on the existing resource
3. Existing resource sits on a granted Mining Lease
4. Nearby plant operator is planning to complete a $400M relisting on the ASX
5. WAU’s other project is next door to a 4.5M ounce gold deposit
6. We are backing John Prineas from St George Mining
7. The ASX likes WA gold companies
8. We are Investing alongside Tribeca Investment Partners
9. Gold price is trading near its all time highs
10. New experienced CEO appointed to drive the business forward

WAU Resources

What’s next for WAU?

🔄 Drilling at the 518k ounce Abercromby project

This is now the first time Abercromby has had a large (10,000m) drill program on it since the maiden resource on the project back in 2023. (source)

Drilling is happening right now. We are hoping to see WAU hit extensions to the existing resource.

Here are the milestones we will be tracking:

✅ Drilling started

🔲 Assay results

🔲 Resource upgrade

🔄 Geophysics on Bullabulling project (next door to Minerals 260)

In the recent presentation WAU put out, WAU said it plans to run geophysics and have it completed before finalising drill targets for Q2 this year (source).

🔄 Updates on Wiluna processing MoU

WAU has an MoU with the Wiluna processing plant operators to treat the ore from its project which sits nearby (~20km), well within trucking distance. Progress on this to lock in a processing agreement will allow WAU to be able to confirm its processing plan.

What could go wrong?

Now that drilling is underway, the main risk for WAU is around “exploration risk”.

There is no guarantee that WAU finds any economic extensions to its existing resource.

There is also a risk that the new drilling data fails to deliver similar results to the old drilling - which could come in below the market’s expectations from this round of drilling.

Any negative drill results could re-rate WAU’s share price lower.

Exploration risk

WAU’s exploration upside is based on geological theories, specifically that the Abercromby resource hosts a "Never Never" style high-grade system at depth, and that the Minerals 260 deposit extends into WAU’s Bullabulling ground. These theories have not yet been proven by WAU’s own drilling. If upcoming drill programs fail to validate these models, the market could re-rate the stock lower.

Source: “What could go wrong?” - WAU Investment Memo 03 February 2026

Other risks

Like any early-stage exploration and development company, WAU carries significant risk, here we aim to identify a few more risks.

The company’s near-term development strategy relies heavily on a non-binding MoU with Wiluna Mining for toll treatment of its ore.

There is no guarantee that this MoU will convert into a binding commercial agreement or that Wiluna’s mill will be available on the timeline WAU requires, which could stall the path to production.

As a junior developer with no current revenue, WAU will likely require further capital to transition from exploration into full-scale mining operations.

Any future capital raises may result in significant shareholder dilution, particularly if the market sentiment toward junior gold stocks softens or the gold price retreats from historical highs.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our WAU Investment Memo

You can read our WAU Investment Memo in the link below.

We use this memo to track the progress of all our Investments over time.

Our WAU Investment Memo covers:

• What does WAU do?
• The macro theme for WAU
• Our WAU Big Bet
• What we want to see WAU achieve
• Why we are Invested in WAU
• The key risks to our Investment Thesis
• Our Investment Plan