Is Waratah Minerals (ASX: WTM) a Buy After 90% Gold Recovery at Spur?

Waratah Minerals hits 90% gold recoveries at Spur

Waratah Minerals (ASX: WTM) climbed 6.35 per cent to A$0.67 on Tuesday after the company reported over 90 per cent gold recovery from initial metallurgical testing at its Spur Gold Project in New South Wales. For a gold explorer sitting just 5 kilometres west of Newmont’s giant Cadia Valley operation, this result matters more than another set of drill numbers. High-grade intercepts are only half the equation; you also need to prove the gold can actually be extracted economically. With gold trading above US$5,000 per ounce and seven diamond rigs turning at Spur, this metallurgical milestone could mark the moment the project shifts from “interesting discovery” to “potentially economic deposit” in the eyes of the market.

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Why 90% Recoveries Change the Investment Case for Waratah Minerals

So what does 90 per cent gold recovery actually mean? In simple terms, for every 100 units of gold sitting in the rock, the company can pull out 90 using standard processing methods. That is a strong result by any measure, and it tells investors the gold at Spur is not locked up in difficult minerals that would require expensive or complex treatment.

What makes this even more encouraging is the processing pathway itself. An average of 33.6 per cent of gold was recovered through gravity, basically using the gold’s own weight to separate it from waste rock, with another 60 per cent recovered through standard cyanidation. This is the same straightforward approach used at nearby large-scale mines like Newmont’s Cadia and Evolution Mining’s Cowal, both operating in similar ore types. For Waratah Minerals, it points to lower future capital and operating costs if the project advances towards development.

At the same time, the 80,000-metre drilling campaign keeps building the scale story. Seven rigs are running across the Spur and Consols zones. Previous drilling returned standout results, including 89 metres at 1.73 grams per tonne gold from 115 metres, with a high-grade core of 9 metres at 9.33 grams per tonne. The gold corridor stretches over 1 kilometre and remains open in multiple directions. We believe this combination of strong metallurgy and growing mineralisation is what shifts a project from an “interesting exploration story” to a “potentially economic deposit.”

Cashed Up With $28.6M But Still Pre-Resource- The Risk-Reward Balance

Waratah Minerals reported a cash balance of AUD 28.6 million at the end of the December 2025 quarter, bolstered by a AUD 30 million placement completed in August at A$0.575 per share. This provides a solid runway to continue aggressive drilling well into 2026 without needing to tap the market again in the near term, which is a meaningful advantage for an explorer at this stage.

However, investors need to recognise what Waratah does not yet have: a maiden resource estimate. Despite the impressive intercepts and growing geological understanding, the deposit remains unquantified. Until the company publishes a formal resource, the market is essentially pricing in potential rather than proven ounces. Analyst opinion reflects this uncertainty: one broker has a Buy rating with a A$0.95 price target, while another rates the stock a Sell at A$0.55.

The bull case rests on Cadia-adjacent discovery potential in a district that has produced over 50 million ounces of gold. The bear case argues that it is still unproven at scale, and the current share price already bakes in a lot of optimism. At the recent price of A$0.67, the stock sits roughly in the middle of those two views, suggesting the market is watching closely but has not yet made up its mind.

The Investor’s Takeaway

Gold above US$5,000 per ounce is a powerful tailwind for any explorer delivering real results, and Waratah Minerals is delivering. The metallurgical milestone ticks off a key uncertainty: the gold can be processed simply and cheaply. That is now confirmed.

Catalysts to watch include ongoing drill results from seven rigs, a potential maiden resource estimate, and further metallurgical work. Each could move the share price meaningfully.

We believe the risk-reward looks attractive for speculative investors given the world-class neighbourhood, strong drill results, and gold price support. But this is still an exploration-stage bet- no resources, no revenue, no guarantees. For those comfortable with early-stage risk who want gold exposure beyond the big producers, Waratah deserves a place on the watchlist. Just size your position accordingly.