Vault Minerals Limited (ASX: VAU)'s gold production will drop this financial year, but the company's shares are up more than 6% on Monday on a stronger outlook for the medium term.
The multi-asset gold producer told the ASX in an announcement that gold production for FY26 would be in the range of 332,000 to 360,000 ounces, down from the 380,985 ounces produced last financial year.
But gold production would bounce back in the following two financial years, initially to a range of 360,000 to 390,000 ounces, then to 370,000 to 400,000 ounces.
The lower year on year production in FY26 is driven by Deflector Region and is consistent with previous commentary as the Deflector mine transitions to an owner-operator model and the centre of mining activity moves to Deflector Southwest and Spanish Galleon. Higher consolidated gold production is forecast for FY27 and FY28, predominantly due to increased plant capacity at the Leonora operations and the recommencement of production at Sugar Zone in FY28.
Vault shares responded well to the announcement, trading as high as 71 cents before settling back to be 6.1% higher at 70 cents.
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Strong gold production timed just right
Vault said the higher gold production in the medium term was timed to coincide with the extinguishment of the company's hedge book in September 2026.
The hedge delivery schedule steps down in H2 FY26, positioning Vault to build momentum through strong half-on-half free cash growth as the company enters FY27 materially unhedged.
Vault is expecting its all-in-sustaining cost of gold production to be between $2650 per ounce and $2850 per ounce in FY26, while the company is expecting to sell its gold for $5200 per ounce.
Exploration spend to continue
The company plans to spend $30 million on exploration in the current year, "focused on in-mine and near-mine targets within existing operations''.
The Leonora operations will receive the largest portion of the investment with about 116,000 metres of resource definition drilling planned. Significant programs are planned for King of The Hills (KoTH) and Darlot underground mines targeting resource growth in both established and new mining areas, including step out targets within the KoTH primary host unit. Additionally, Vault has reinvigorated regional exploration which includes a program targeting 12km of under-explored mineralisation along strike of the KoTH mine operations.
The company plans to spend $278 million outside of its all-in sustaining costs, with $122 million to be spent on a plant upgrade at its Leonora operations and $29 million to buy and mobilise the underground mining fleet at the Deflector mine.
