Should You Invest in Vault Minerals? What Investors Need to Know

From Merger to Momentum: Vault Minerals’ Quiet Rise

In a market full of speculation, early-stage miners, and dream-driven valuations, Vault Minerals is taking a different path, one grounded in operational reality. Formed in mid-2024 through the merger of Silver Lake Resources and Red 5, Vault didn’t arrive with hype; it arrived with production. Lots of it.

Across three active hubs in Australia: Leonora, Deflector, and Mount Monger, plus a growth stage asset in Canada’s Sugar Zone, Vault is already pouring gold and generating cash flow while most of its peers are still drilling. But what makes this story compelling isn’t just the ounces, it’s the inflection point.

With major plant upgrades underway, a $575 million cash balance, and early-stage traction in international markets, Vault is quietly building the foundations of a next-tier gold producer. The question for investors now isn’t whether there’s gold in the ground; it’s whether the market has priced in what’s above it.

Leonora Operations (King of the Hills & Darlot)

Leonora stands as the cornerstone of Vault Minerals’ long-term production strategy, not just in size, but in scalability. With 2.24 million ounces in Ore Reserves and over 6 million ounces in Mineral Resources, this district offers both volume and longevity, underpinning a 10-year base case mine life.

A base case mine life refers to the estimated number of years a mine can operate and produce minerals profitably using current reserves, production rates, and economic assumptions.

To make the most of it, Vault is investing in three key upgrades. First, an $80 million Stage 1 expansion will boost processing capacity by 20 percent. Stage 2 could take that even further, up to 8 million tonnes per year. At the same time, waste stripping is opening access to higher-grade gold, which should drive down costs and lift profits. It’s a smart, forward-looking play, using today’s cash flow to unlock more value tomorrow.

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Why This Mine Matters More Than You Think (Deflector)

The role of the Deflector Operation is to create a diversified production base, complementing its larger Leonora hub with high grade, high margin output. Located in Western Australia, Deflector is an underground gold and copper mine that delivers strong cash generation and operational consistency.

During the first half of FY25, the Deflector mine produced over 60,000 ounces of gold (including the value of copper by products). The gold extracted had a high concentration, 5.5 grams of gold per tonne of rock mined, which means the ore is rich and efficient to process.

The all in sustaining cost (AISC) was A$1,460 per ounce, meaning that’s how much it cost Vault to produce each ounce of gold, including all operating, maintenance, and sustaining capital expenses.

Since the gold price has been above A$3,000 per ounce, this means Vault was producing gold at less than half the market price, resulting in strong profit margins from Deflector.

From a strategic standpoint, Deflector fits seamlessly into Vault’s growth strategy. It’s a self-sustaining asset that provides reliable free cash flow, helping to fund major capital programs at Leonora and Sugar Zone. The copper component of this mine also acts as a hedge against volatile gold price swings, which is a valuable diversification lever.

Risks Every Investor Should Understand

One of the biggest risks for Vault Minerals and most gold miners is reliance on the gold price. While gold has performed strongly in recent years, especially during periods of uncertainty, it remains a volatile commodity. Vault’s revenues are heavily tied to gold, with only minor diversification through copper at Deflector. If gold prices were to drop sharply, Vault’s profits could fall just as fast, especially given its high reinvestment rate into mine expansions and exploration.

Another important risk is cost inflation. Mining is energy and labour-intensive, and periods of high inflation — like during the COVID era when inflation peaked at 9 percent — can quickly drive up operating costs such as fuel, equipment, and wages, squeezing margins even if gold prices hold steady.

But perhaps the most overlooked risk for new investors is exploration uncertainty. Just because a company owns a piece of land doesn’t guarantee it will find profitable gold deposits. If drilling results at projects like Sugar South or Leonora’s satellite deposits fall short, Vault’s future production plans could be delayed or derailed.

In short, even with strong assets, mining and resources companies live and die by what they can extract — and at what cost. And they are vulnerable to commodity prices, something it is easy to forget when a company’s commodity is at an all time high.