Star Minerals have entered into a right-to-mine agreement with mining contractor MEGA Resources and Bain Global Resources for its Tumblegum South gold project in Western Australia (WA).
Bain Global Resources, the finance arm of MEGA Resources, holds 9.7% of Star Minerals’ shares and is providing up to A$20m ($13.06m) in working capital through MEGA Resources.
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Under the agreement, MEGA Resources is granted the mining contract for the Tumblegum South project, operating under arms’ length, commercial terms.
The agreement includes a 50:50 profit share arrangement between Star Minerals and Bain Global Resources, following the recovery of all costs incurred by both Star Minerals and MEGA Resources.
This funding structure is intended to reduce Star Minerals’ dependence on share issuances or high-risk debt for project finance.
Star Minerals managing director Ashley Jones said: “This agreement is a win-win for the parties. Leveraging risk-free working capital provided by MEGA Resources means less dilution for our shareholders and mitigates cash flow timing issues. Getting cash flow into the company and alignment with a trusted partner with the same goals are key ingredients for successful economics.”
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By GlobalDataMEGA Resources, which currently operates three gold mines, plans to commence mining at Tumblegum South in the first quarter of 2026 (Q1 2026).
The agreement is contingent on the signing of an ore purchase agreement between Star Minerals and a processing plant, with both MEGA Resources and Star Minerals actively seeking a processing solution.
Star Minerals submitted its mining approvals application to the WA Department of Mines, Petroleum and Exploration on 9 September 2025, and its Native Vegetation Clearing permit application on 14 July 2025.
The right-to-mine agreement will remain in force until all ore from the approved mine plan has been processed and all associated profits have been distributed.
The agreement may be extended by mutual consent to include additional mine plans.
Standard termination clauses apply, including circumstances such as insolvency or serious default.
Upon expiry or termination, MEGA Resources’ exclusive remedy for any unrecovered development expenditure is limited to proceeds from ore stockpiles.
In April this year, Star Minerals signed a memorandum of understanding with MEGA Resources to advance the Tumblegum South gold project.
