Polymetals (ASX:POL) revenue jumps 65% as Endeavor turns cash machine

Operating cash of A$10.4m plus 45m at 436g/t silver-equivalent hits reframe the resource growth story

Polymetals Resources (ASX:POL) has delivered the quarter its shareholders have been waiting for since the Endeavor Mine restart. Revenue climbed 65% to A$45.8 million, operating cash flow came in at A$10.4 million and the cash pile grew to A$29.1 million while debt fell 29% to A$10.7 million. The single-quarter improvement across every financial line is the clearest evidence yet that the Cobar Basin restart is working.

The production numbers underneath the financials matter just as much. Polymetals pulled out 396,485 ounces of silver, 490 ounces of gold, 3,268 tonnes of zinc and 2,061 tonnes of lead. Ore mined jumped 48% quarter-on-quarter and unit operating costs have now fallen 27% over the past three quarters.

The other piece of the story is the drill bit. Underground diamond drilling next to the historic 1996 subsidence returned 45.2m at 197g/t silver, 8.9% zinc and 11% lead, along with several other high-grade hits. Management thinks the collapse took out far less of the orebody than everyone had assumed, which is a genuinely interesting reframe for a mine most of the market treated as picked over.

The operating leverage is finally showing up in the numbers

The most telling line in the quarterly is unit costs. Group operating costs per tonne dropped to A$303.70 from A$378.50 in the March quarter, a fall of nearly 20% in a single period. That is the kind of move you only get when a restart mine crosses the threshold from stabilising to genuinely ramping.

Silver grades came off from the March quarter peak of 286g/t to 123g/t, but recoveries held at 86% and zinc concentrate grades climbed above 50%, which lifts payability. The mix looks healthier even at lower head grades.

The 4 July trial of high-grade Upper North Lode ore as Direct Shipping Ore is worth watching. If Polymetals can sell high-grade material direct to smelters without milling it, the revenue conversion cycle tightens and margin per tonne moves up.

Why the Upper Main Lode drilling changes the mine life story

For years the working assumption at Endeavor was that the 1996 subsidence swallowed a large chunk of the Main Lode. The June quarter drilling suggests that assumption was wrong. Twelve of the first fifteen holes hit meaningful widths of high-grade silver-lead-zinc mineralisation immediately adjacent to existing underground infrastructure.

The intercepts are not marginal. 45.2m at 197g/t silver with 8.9% zinc and 11% lead sits comfortably in the top tier of anything drilled in the Cobar Basin this decade. Critically, this material is next to existing development, meaning the cost to convert it into mineable inventory is a fraction of what a greenfield discovery would require.

The 34-hole campaign continues from the 10120 Level platform, with Deep Zinc Lode drilling planned next. We think a resource update over the next 12 months is where this thesis either confirms itself or does not.

The risks worth naming before getting too enthusiastic

The A$30.9 million rehabilitation bond replacement due by 1 August 2026 is the near-term item that needs a clean resolution. Polymetals has A$29.1 million in cash and A$15.8 million of undrawn facilities, so the arithmetic works, but the replacement mechanism itself is not yet finalised.

Silver and zinc prices have carried the revenue line as much as volume has. The A$62/oz silver assumption baked into the equivalent calculations is a strong number, and any pullback would compress the operating leverage described above.

Worth noting the mine is one quarter of consistent performance into what needs to be several years of it. The employee profit share scheme is a smart cultural move, but it also tells you management thinks the next phase is about execution discipline more than headline discoveries.

The Investors Takeaway for Polymetals Resources

The June quarter turned Polymetals from a promising restart into something that looks like a genuine producer. Cash generation, falling unit costs and high-grade drill results all landed in the same three months, which does not happen often for micro-cap miners.

The next test is whether September can repeat the operating cash number without the benefit of the March quarter’s stockpile drawdown, and whether the bond replacement goes through cleanly. If both happen and the Upper Main Lode drilling keeps hitting, a resource update in the first half of calendar 2027 becomes the re-rating catalyst. Investors can find more in-depth coverage of ASX-listed silver and zinc producers at stocksdownunder.