Fantastic. Next up, we have Paul Bennett, Managing Director of Medallion Metals. Paul Bennett, Managing Director of Medallion Metals, has led the company through its evolution from explorer to emerging gold producer. Under Paul's leadership, Medallion has advanced the Ravensthorpe Gold Project through resource growth, permitting, and feasibility studies, through to financing approval for the development project, which is now approaching production. More recently, he led the strategic acquisition of the Forrestania Gold Project, including the Cosmic Boy processing plant, associated infrastructure, and gold tenement package, a transaction that has unlocked shareholder value and created a platform to expand Medallion's production profile, mine life, and future growth opportunities. Thank you, Mike.
Well, good on you, Tim. Thanks for that intro. To the organizers and the sponsors, thanks for hosting us here, and to everyone who's hung around for this final presentation before lunch, lots of familiar faces in the crowd. Thanks for your time as well. A year ago, we stood at this stage and presented our vision to become a gold and copper producer in Western Australia. We're back again a year later. We're on the cusp of first production and about to enter into what I think is going to be an incredibly transformational period for the business. We've made huge strides over the last 12 months, crafting a pathway to unlock a lot of value in the near term, whilst also advancing a much broader strategic opportunity that we think has got tremendous potential.
I'm going to step you through our plans to unlock that value, to realize that potential, and position our shareholders to do well when we execute on that plan. Here's the investment thesis in a single slide. Management's been successful in bringing together two highly complementary assets. The high-grade plus million ounce resource at Ravensthorpe, together with the established processing infrastructure at Forrestania. Together, those assets create that foundation upon which you build the new gold and copper producer. This is a significantly de-risked project development story. We expect to achieve first production next quarter, and then within 12 months from there, be up and running 100% at steady state production from our own assets. The capital's sufficient to get us to an initial run rate of about 80,000 ounces per annum.
Combine that with strong operating margins, the project generates superior risk-adjusted returns and a rapid payback of that capital. That's not what excites us the most about this, because it's really just a stage one. You get gold production capability up and running at Forrestania. It creates a range of growth options for the business, both from within the ground that Medallion controls, and then more broadly across the third-party tenements across the broader region. Not only are we focused on delivery and cash flow, but we're building a business that has got long-term expansion potential, and our objective is to double that initial production rate over the next four years. Just touching on corporate. Market cap about AUD 330 million. We finished June with AUD 54 million of cash at the bank.
If you combine that with the US $50 million project loan from Trafigura, we have the balance sheet, we have the lines of finance to build that project and achieve our objectives over the next 12 months. We've invested heavily in leadership. The board, the senior management team, has both been strengthened with some high-caliber individuals over the last 12 months. That team is now purpose-built to manage this transition from developer to producer, and then through that growth opportunity that's going to extend beyond there. The market support continues to build. The stock's well covered. Those broker target prices some way north of where we're trading it at the moment, so giving investors some confidence that there's some room to run here. Also worth noting the register.
In addition to Alkane, who kicked off this panel session, we've been successful in building a significant high-quality institutional representation there, and I think that corporate and institutional support is a real endorsement of our team, of our assets, and our strategy. If you turn to the sulfide production strategy, this is two years old now, and this strategy shift is what's had such a dramatic impact on our business, our valuation, our ability to access capital. At its core, it's all about reducing the time and the money and the risk to get to first production. It really rests on two key pillars. The first at Ravensthorpe, where we focus on mining the sulfide component of the mineral resource. This is the best understood.
It's the highest value part of the deposit, and by mining it, concentrating on mining it from underground, what we did was reduce the disturbance footprint dramatically. That led to a streamlined pathway through the approvals process. The project's now fully permitted. We'll commence the excavation of the box cut this month, and we expect to cut the portal in November. The second element to the strategy is at Forrestania, where we leverage infrastructure instead of building it from scratch. At Forrestania at the moment, there is a fully functioning sulfide float plant that's well-suited to treating Ravensthorpe ore. It is on grid power. There's a tailings storage facility there. There's remarkable support infrastructure and even underground mine infrastructure, which we'll transplant from Forrestania to Ravensthorpe. This all takes pressure off schedules and budgets.
The more we look at this, over the last 2 years, through bringing these two assets together, what it's done is create a capital-efficient, rapid, low-risk pathway to production. The more we look at this strategy, the more we like it, the more synergies we see, and the more opportunities that we see in it. Key amongst those is that gold option. It's embedded at Forrestania. When we acquired that asset, we thought it had gold potential. Today, we know it does, and I'll come to that in a couple of slides. Just turning to the feasibility study. This was released in December of last year. These numbers are still recent. They're still relevant. In fact, we're de-risking significant amounts of the input cost base here as we get towards preferred tenderer status on most of the major contracts.
The production inventory, 3.5 million tons at 3.6 grams gold, 0.5 copper. 650,000 ton per annum throughput rate yields a mine life just shy of six years. We have high metallurgical recoveries to two principal products, a copper concentrate with a precious metal credit, hence Trafigura's interest. Then we leach the float tail at the back end to make doré. This is a direct analogy for Deflector, for those who know that asset, in terms of mineralogy and of process route. If you put those metrics together, it yields an average run rate of 77,000 ounces per annum over that mine life. If we take the physical metrics and drape over them some conservative macro and cost assumptions, it yields upfront project capital of AUD 138 million. High margins, all-in sustaining costs at around about AUD 2,300 an ounce. That is Aussie and it is net the byproduct credit.
Project generates, on average, AUD 150 million of cash per annum under the base case. Impressive returns, rapid payback, and of course, all of those metrics greatly enhanced if you run a spot scenario. That is not unique to our project. The other thing the project is levered to, and something that is within our control, is increases in the production profile. So making the project go faster, making it go for longer, and we are working on three principal initiatives to manifest that when we get that gold production up and running at Forrestania. The first of these is the early processing strategy, where we are looking to turn on the process plant at Forrestania and set the business up for toll treatment. Relatively minor modifications required here.
What we are doing is using the existing crushing, grinding, and tank infrastructure and repurposing it slightly for conventional carbon-based gold recovery. What is going on here is that we are loading gold onto carbon at Cosmic Boy, and then we are taking that off-site and having it stripped at a third-party facility. The implementation capital here, around about AUD 2 million, we will fund it from existing cash reserves, and we expect to have a rapid payback once we get up to steady state in the fourth quarter of this year. Importantly, we have secured a toll treatment agreement on a minimum of 200,000 tons of material there, whereby Medallion gets paid AUD 100 a ton to treat that material, and we take no risk on the grade or the recovery. In addition, we have secured another 60,000 tons under a profit share agreement there.
At a minimum, we expect this covers the holding costs of Forrestania ahead of Ravensthorpe ore deliveries in the middle of 2027. It has the potential to do much better than that, though, and create a significant funding buffer for the business. In addition to that, it gets us match fit to treat our own ore next year. The second opportunity is at the foundational asset of the business, the Ravensthorpe Gold Project, specifically the Kundip Mining Centre. We have drilled 100 kilometers of new drilling here since we listed in 2021 to grow the resource to where it stands today, which is 950,000 ounces at 5.2 grams on a gold equivalent basis. That is in the sulfide only. There is another 240,000 ounces at 1.8 grams in the oxide and the trans, which is not in the feasibility study, but it is an optional growth in the future.
Now, this is a significant mineralized system. We believe we are just starting to scratch the surface of it. It remains shallowly drilled. Average depth of drilling here, 100 m. Mineral resource is estimated to 330m . The deepest ore grade bedrock hit we have got into the system is 440 m. These are all shallow metrics for an Archean gold lode. The lodes are open at depth. In some cases, they are open along strike. We have just completed a 16 km infill and extensional program here, about 11 km of that drilling back from the lab. Fair to say, those results have been exceptional. In terms of the infill, it is building our confidence in the early stages of the mine plan.
In terms of the extensional results, and the most recent set, which we released last week, as shown there on that cross-section, it is demonstrating that those lodes are extending at depth, and we are also seeing the development of a new high-grade lode position in the footwall of the Gem deposit. Attention really turns now to underground mine development here at Kundip. The next round of infill and extensional drilling will take place from underground, but we will mobilize surface rigs here in the back half of 2026 to continue those extensional targets. Shareholders have got a lot to look forward to as Kundip continues to reveal itself. At Forrestania, the third opportunity, and by no means the least, when we acquired this asset, along with it came 900 square kilometers of mineral tenure that straddles the Forrestania greenstone belt.
Now, this is a historical, fertile gold field that has been locked in a nickel business for a generation. It threw up Bounty, which produced 1.3 million ounces at 5 grams over its operating life. The field has got pedigree. Bounty is not in the tenement package, but we have got the geology to the north and to the south. Along with this tenure came a huge amount of data. There are 33 registered gold prospects in that tenement package in the WAMEX, three historical gold resources, 50,000 drill holes, many not assayed for gold, a huge amount of geochem and geophysics data. What that has led to for us is a multitude of walk-up drill targets and areas of interest that we would follow up based on the anomalism we can see in that data set.
Now, an opportunity like this really needs time and balance sheet and technical capability to systematically work through, and that process is well underway on our side. But what we are really focused on are the prospects within that portfolio that can rapidly become a second or even a third feed source for that Cosmic Boy plant. The most advanced of these is at Lounge Lizard. Lounge Lizard produced about 20,000 ounces at 5 grams in the mid-1990s from two small pits. Since Medallion Metals' ownership, or prior to Medallion Metals' ownership, there has been no drilling here since 1999. This deposit is drilled out over a kilometer of strike length on 25 m centers. The deepest ore grade hit we have got into the system is 466 m below surface. We have drilled 6 confirmatory holes across the deposit. Those assays are pending. There is a mineral resource estimate underway.
That will inform option studies that look at how we commercialize this deposit as quickly as possible. It is on a granted mining lease. It is situated 14 km north of the Cosmic Boy processing plant, and it is immediately adjacent to the Flying Fox surface infrastructure and underground mine infrastructure. We believe this is a genuine near-term development opportunity. If we are correct in that assessment, it does give us the opportunity to make that project go faster, go for longer. In addition to that, it is a massive de-risking milestone for the business because they have that second feed source into that plant, and we are not 100% reliant on the deliveries from Ravensthorpe.
Where to from here? Two principal work streams underway in the business at the moment, one at Ravensthorpe, one at Forrestania, and both of them really focused on getting us to production as quickly as possible.
The development of the underground mine plan is the critical path activity to get us to steady state production. The project is now fully permitted. The box cut excavation will commence this month. We expect to cut the portal in November. The site civils and bulk earthworks contracts, the surface infrastructure installation contracts, are on the cusp of being awarded. We expect first ore production from the underground mine four months after we commence the development, remembering that the deposit starts between 40 and 50 meters below surface. Then we will roll into the production phase of the underground mine a further six months after that. Remembering that this mine is backstopped by our own stockpiles at Forrestania, as well as those third-party processing opportunities. At Forrestania, the site civils have commenced on the expanded plant footprint. The second ball mill will arrive this month.
The mill modifications and upgrades are underway ahead of that early production strategy, and we are already seeing third-party ore deliveries commence to the Cosmic Boy ROM. The process plant will be reactivated in the fourth quarter of this year. It will produce at about 80,000 tons per quarter until the middle of 2027 when we will commission the expanded and modified plant on that Ravensthorpe ore. A lot to look forward to here. First production, de-risking milestones, and then of course, value add via the drill bit as we chase those extensional targets at both Kundip and Lounge Lizard. To summarize and wrap it up, we think Medallion represents a compelling opportunity if you are an investor seeking exposure to near-term gold and copper production in W.A. The business is well-run, it is well-funded, it is attractively priced relative to its peers.
Over the last two years, we have crafted a clear capital-efficient pathway to becoming an 80,000 ounce per annum producer, whilst at the same time meaningfully reducing the risk and the time associated with getting to first production. Over the next 12 months, as we clear these key milestones, I think the gap between the value of the company and the underlying value of the business and the growth opportunities that extend beyond it will just continue to narrow. We enter a really catalyst-rich period of time. We are supported by a strong AUD 8 gold price, corporate activity across the sector. We are uniquely positioned to capture those tailwinds. I think the next 12 months will be even more transformative as opposed to the year that is just gone before us, and we look forward to keeping everyone updated on our progress through that process.
Thanks, Tim, and thanks everyone for your time.
Thank you very much, Paul. That concludes the session. Thank you very much for your attendance today, and lunch will be served in the main hall.