Vertex Minerals (ASX: VTX) Pours First Gold Bars as Reward Mine Targets 500oz Monthly Production

Vertex Minerals (ASX: VTX) has achieved a significant breakthrough at its Reward Gold Mine in New South Wales, pouring its first gold bars as operational improvements begin to address delays that have constrained production.

The 19 October 2026 update revealed stronger mining flexibility, improved processing capability and a planned production increase to approximately 500 ounces in December. The question now is whether Vertex can turn these improvements into sustainable cash generation before funding pressures intensify.

Key numbers

• Nearly 1kg: Weight of Vertex's maiden gold bar, with two bars poured during October 2026.
• 39oz: Gold produced in September 2026, with 44oz sold.
• 500oz: Management's forecast monthly gold production for December 2026.
• 146,900oz: Updated Reward Mineral Resource grading 16.68g/t gold.
• $4.24 million: FY2026 gold and silver sales revenue, against a $16.41 million net loss.

First gold bars mark an important operational turning point

Vertex's maiden gold pour represents a meaningful step in the transition from mine development to commercial production.

Previously, gold recovered through the Reward processing plant was sold as concentrate containing approximately 30% gold.

The introduction of a spiral wheel has enabled the company to upgrade concentrate sufficiently for smelting, allowing gold bars to be produced on site.

This potentially reduces reliance on third-party concentrate processing while improving control over the final product.

However, the more important operational development involves underground mining.

Following regulatory approvals, Reward now operates 12 hours daily, seven days a week, with greater flexibility around underground blasting.

Vertex intends to extend mining operations to 24 hours daily, supported by additional equipment and expanded development activities.

Narrow-vein mining improvements could strengthen margins

Reward's high-grade gold mineralisation presents both an opportunity and an operational challenge.

Its narrow veins require precise extraction to minimise dilution from surrounding waste rock.

Vertex has successfully completed a trial long-hole open stope, demonstrating the feasibility of mechanised extraction within narrow mining widths.

Although recovered grades were below expectations, the trial provided valuable technical evidence.

Meanwhile, smaller underground development profiles are reducing dilution by more than 20%.

Lower dilution could improve processing feed grades and reduce the quantity of waste material handled, potentially lowering operating costs per recovered ounce.

The company has also commissioned a second underground truck, while a specialised Resemin long-hole drill is expected to arrive in Australia during November.

These improvements are essential to increasing ore supply and processing efficiency.

Revenue growth reveals the cost of a difficult commissioning period

Vertex's FY2026 financial results highlight the difference between establishing production and achieving profitability.

Gold and silver sales revenue increased to $4.24 million from approximately $288,000 in FY2025.

The company produced 679 ounces and sold 657 ounces during FY2026, demonstrating its transition into a revenue-generating gold operation.

Nevertheless, its net loss widened to $16.41 million from $5.85 million.

The result included substantial financing and non-cash accounting charges, alongside expenditure associated with mine development.

Operating cash outflows reached $5.07 million, compared with $4.86 million previously.

More significantly, payments for mine development and plant totalled $15.17 million.

Cash reserves stood at $2.32 million on 30 June 2026, while current liabilities substantially exceeded current assets.

Vertex subsequently announced a proposed convertible loan funding arrangement of up to $4.2 million in September.

The financing position highlights continuing capital requirements and potential shareholder dilution.

Without sustained positive operating cash flow, traditional earnings-based valuation measures remain unsuitable.

Can Reward reach 500 ounces in December?

The October operational plan outlines a substantial production increase.

Management forecasts approximately 100 ounces in October, 150 ounces in November and 500 ounces in December.

These are operating forecasts rather than guaranteed production targets.

Achieving them will depend on underground development rates, equipment availability, recovered grades and processing performance.

The updated Reward Mineral Resource of 274,000 tonnes at 16.68g/t gold provides a high-grade geological foundation.

However, the resource does not establish economically recoverable reserves or guarantee production.

The next quarterly reports should reveal whether increased mining hours are translating into higher production and improved cash generation.

Insight: Production growth must outpace Vertex's funding pressures

What stands out to us is the relationship between Reward's improving mining efficiency and Vertex's substantial financial commitments. Reducing dilution by more than 20% could improve recovered grades and operating margins, while extended mining hours offer an opportunity to increase throughput. However, the FY2026 operating cash outflow of $5.07 million demonstrates why operational progress alone is insufficient. We see the decisive opportunity in establishing consistent, profitable production, with December's forecast 500-ounce output providing an important measurable test.

The verdict: A promising gold producer facing a crucial production test

Vertex has made tangible progress towards commercial gold production through improved mining methods, increased operating flexibility and successful gold bar production.

Nevertheless, funding requirements and historical operating losses remain significant risks.

The strongest evidence of a sustainable business will come from consistent monthly production growth, improved unit costs and stronger operating cash flow.

December's production performance could provide the clearest indication yet of whether Reward can become a financially sustainable underground gold operation.