Vault Minerals Limited (ASX: VAU) has unveiled an ambitious expansion strategy that positions the company for substantial production growth over the next three years. The gold producer’s flagship Leonora operations in Western Australia have become the cornerstone of this growth plan, following a remarkable 39% increase in ore reserves and comprehensive processing facility upgrades.
The company’s strategic focus on the Leonora gold mine expansion reflects broader trends in Australia’s gold sector, where established producers are prioritising brownfield development over riskier greenfield projects. With gold prices maintaining strong levels above $3,000 per ounce in Australian dollar terms, the timing appears optimal for significant capacity investments.
Leonora Operations Drive Reserve Growth
The King of the Hills (KOTH) operation has emerged as the star performer in Vault’s portfolio. Recent resource updates show Leonora’s ore reserves surged to 2.8 million ounces, representing a substantial 39% increase post-depletion. This growth forms part of broader portfolio expansion that has seen group-wide ore reserves increase by 33% year-on-year.
Figure 1: Vault Minerals Production Outlook FY 26 – FY 28
Leonora’s mineral resources also expanded by 7% to reach 6.2 million ounces of gold. The operation now contains 3.4 million ounces in the open pit alone, based on 116 million tonnes grading 0.91 grams per tonne. This resource base provides exceptional production visibility and supports the company’s long-term planning capabilities.
The revised mine plan incorporates a higher gold price assumption of $4,500 per ounce compared to the previous $3,500 per ounce, along with a lower reporting cutoff of 0.3 grams per tonne. These adjustments reflect current market conditions and improved mining economics.
Multi-Phase Processing Expansion Strategy
Vault Minerals production growth 2025-2028 centres on a carefully phased processing capacity expansion at KOTH. The company has approved an $80 million Stage 1 expansion that will increase plant throughput capacity to 6 million tonnes per annum, representing a 20% increase from current levels.
Stage 2 planning is already underway, with the company confirming it will proceed with additional upgrades targeting 7.5 million tonnes per annum by late in the second quarter of the 2027 financial year. This represents a 50% increase in throughput capacity from current levels of 5 million tonnes annually.
The expansion timeline positions Vault for production of 215,000 ounces per year over the next five years, with potential to reach peak production of 235,000 ounces annually. This production profile significantly enhances the operation’s scale and supports an 18-year mine life based on current reserves.
Key infrastructure enhancements include:
- New crushing circuit and increased tankage capacity
- 9MW regrind ball mill installation
- Enhanced gravity and carbon-in-leach circuits
- Expanded power generation and tailings storage facilities
Strong Financial Foundation Supports Growth
Vault’s expansion plans are underpinned by robust financial performance and strong cash generation. The company reported net profit of $236.98 million for the full year, with quarterly gold production reaching 98,459 ounces in the June quarter—a 13% increase from the previous quarter.
Cash reserves stood at $685.9 million as of June 2025, bolstered by $92.3 million in free cash flow generated during the quarter. This financial strength provides the company with flexibility to fund expansion activities without compromising balance sheet quality.
The operation achieved an average realised gold price of $3,812 per ounce during the March quarter, significantly above historical levels. Current gold market conditions continue to provide favourable pricing tailwinds for Australian producers.
Operational Excellence and Cost Management
Despite significant expansion investments, Vault maintains focus on operational efficiency and cost control. The company has implemented various initiatives to improve grade profile and processing throughput optimisation while targeting higher-grade mining areas to enhance mill feed quality.
The Darlot underground mine has also contributed to resource expansion, with drilling increasing confidence in life-of-mine extensions. At KOTH underground, first-phase exploration from the W5000 drill drive has intersected mineralisation 300 metres beyond the current underground envelope.
Figure 2: KoTH long section showing planned FY26 drilling, including four stratigraphic holes
Recent drilling results across multiple targets have confirmed extensions to mineralisation at both KOTH and Darlot underground operations. These discoveries support potential resource upgrades and mine life extensions beyond current projections.
Strategic Market Positioning for Vault Minerals
Vault’s expansion strategy aligns with broader trends in the Australian gold mining sector, where established producers are prioritising organic growth over acquisitions. The company’s multi-asset approach provides operational redundancy and multiple growth avenues.
The Leonora district’s geological characteristics and established infrastructure provide significant advantages for expansion activities. The region’s long mining history and proven track record reduce execution risk compared to greenfield developments.
Industry analysts have responded positively to Vault’s growth strategy, with consensus price targets around $0.60-0.70 per share reflecting confidence in the expansion plan’s execution. The company’s current market capitalisation of approximately $4.46 billion positions it as a significant mid-tier gold producer.
Vault Minerals share price
Future Growth Catalysts
Beyond the current expansion phase, Vault continues exploring additional growth opportunities. The company maintains interests in the Sugar Zone project in Canada, providing geographic diversification and potential future production growth.
Ongoing exploration activities at Leonora target satellite deposits that could provide supplementary feed to the expanded processing facility. The company’s systematic exploration program covers multiple prospects within the established mining district.
The broader Australian mining sector continues benefiting from strong commodity prices and investor appetite for growth-oriented producers. Vault’s expansion timeline positions the company to capitalise on these favourable market conditions.
Investment Outlook
Vault Minerals’ three-year production growth strategy represents a compelling investment proposition in the current gold market environment. The company’s focus on established operations, strong financial position, and proven management team provide confidence in successful execution.
The Leonora expansion project’s staged approach allows for careful capital allocation while maintaining production growth momentum. With gold prices expected to remain elevated, the timing appears optimal for this significant capacity investment.
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FAQs
- What is Vault Minerals’ production target for 2028?
Vault targets 215,000 ounces annually over the next five years, with peak production reaching 235,000 ounces per year.
- How much is Vault investing in the Leonora expansion?
The company has approved $80 million for Stage 1, with additional investment planned for Stage 2 to reach 7.5 million tonnes per annum capacity.
- What are Vault’s current ore reserves at Leonora?
Leonora operations contain 2.8 million ounces in ore reserves following a 39% increase, supported by 6.2 million ounces in mineral resources.
