Sunstone Metals (ASX: STM): 6.2Moz gold-copper resource and exceptional drilling strengthen Ecuador growth story

Sunstone Metals is building an increasingly substantial gold-copper development opportunity in Ecuador, with its Bramaderos project delivering a 72% increase in mineral resources to 6.2 million ounces of gold equivalent (AuEq). Exceptional high-grade drilling at Melonal, improved metallurgical recoveries and renewed exploration at El Palmar are adding further depth to the company's growth prospects. The opportunity is becoming more compelling, although converting geological progress into commercially viable projects and securing development funding remain the key challenges.

Key numbers

• 6.2Moz AuEq: Bramaderos mineral resource, increased 72% in October 2026.
• 3.3Moz AuEq: Indicated resource, representing approximately 53% of the total.
• 26.6g/t AuEq: High-grade intersection over 5.95 metres at Melonal.
• 93% gold and 80% copper: Updated metallurgical recovery estimates.
• A$6.47 million: Cash and cash equivalents at 30 September 2026.

Bramaderos is emerging as a much larger gold-copper opportunity

The October resource upgrade represents a significant step in Sunstone's strategy to establish Bramaderos as a substantial development project.

The updated estimate comprises 464 million tonnes at 0.42g/t AuEq, including 229Mt in the Indicated category and 236Mt Inferred. The increase reflects drilling at Copete, Porotillo and Melonal, alongside extensions to existing mineralised areas and updated modelling assumptions.

Particularly encouraging is the 450% increase in the Indicated resource to 3.3Moz AuEq. This provides a stronger geological foundation for future technical studies and potential mine planning.

The Copete-Porotillo discovery contributes approximately 1.3Moz AuEq, while the broader Bramaderos system remains open to further exploration. An additional exploration target of 4.4Moz to 11.2Moz AuEq highlights the potential for further growth, although this remains conceptual and separate from the defined resource.

Exceptional Melonal drilling adds another dimension

The September-quarter report provides further evidence supporting Bramaderos' expanding geological potential.

Drill hole MEDD005 returned 9.35 metres at 17.23g/t AuEq, including 5.95 metres at 26.61g/t AuEq. The intersection also contained a peak gold assay of 55.9g/t over two metres.

This high-grade zone, located between the Melonal and Alba porphyry systems, introduces an additional dimension to the project's exploration potential.

Meanwhile, MEDD007 intersected 367.99 metres at 0.45g/t AuEq, supporting the interpretation that mineralisation extends below and beyond the previously modelled southern pit wall at Melonal.

At Porotillo, drill hole PTDD020 returned 175.8 metres at 0.50g/t AuEq from surface. Together, these results reinforce the potential to expand the existing resource through continued drilling.

Importantly, mineralisation was intersected in all 30 holes from the company's resource-growth drilling programme, although further work is required to establish the economic significance of individual intersections.

Better recoveries could strengthen project economics

Sunstone is also making progress beyond resource definition, with metallurgical test work producing improved recovery estimates for Bramaderos.

Updated results support gold recovery of 93% and copper recovery of 80%, compared with the April 2026 Scoping Study assumptions of 85% and 75%, respectively.

Higher recoveries could increase payable metal production from the same quantity of ore, potentially improving operating margins, unit costs and overall project economics.

The original Scoping Study outlined a potential 23-year open-pit operation, supported by a 10-million-tonne-per-annum processing plant. It estimated average annual production of 135,000oz AuEq during the first eight years, with an all-in sustaining cost of US$1,499/oz after by-product credits.

Its estimated post-tax net present value was US$900 million, based on a gold assumption of US$3,500/oz.

These figures were calculated using the earlier 3.6Moz resource and previous metallurgical assumptions. The enlarged resource and improved recoveries provide a stronger foundation for an updated Scoping Study, which should give a clearer indication of the project's development potential.

El Palmar provides a second avenue for discovery

Sunstone's growth strategy is not limited to Bramaderos.

Drilling restarted at El Palmar in October, with four planned holes totalling approximately 3,650 metres, including deeper testing of the T3 target.

The project already hosts a 1.2Moz AuEq mineral resource at T1, while its broader exploration target of 15Moz to 45Moz AuEq highlights the potential scale of the wider geological system.

Sunstone increased its ownership to 82.6% following a US$540,000 payment in July, giving it greater exposure to future exploration success.

The next drilling results will be important in determining whether additional mineralised zones can support resource growth and establish El Palmar as a second meaningful development opportunity.

Funding is the main hurdle to overcome

Sunstone ended September with A$6.47 million in cash, following A$9.94 million in gross equity proceeds during the quarter.

Exploration and evaluation expenditure reached A$2.72 million, while net operating cash outflows were A$926,000. The Appendix 5B indicated approximately 1.8 quarters of funding availability based on the prescribed expenditure calculation.

This highlights the importance of securing additional funding as the company advances two substantial projects.

However, the company's ongoing discussions around strategic partnerships and alternative funding arrangements offer a potential pathway to support development without relying exclusively on further equity issuance.

The completion of its RBC arrangement during the quarter is also relevant as Sunstone considers its longer-term funding structure.

Insight: Could two expanding projects create a stronger development platform?

What stands out to us is that Sunstone is progressing beyond simply increasing its resource inventory. Bramaderos now combines 6.2Moz AuEq, a substantially larger Indicated resource and improved metallurgical recoveries, while exceptional Melonal intersections provide further exploration potential. El Palmar adds another opportunity through its existing 1.2Moz resource and renewed drilling programme. We see a credible foundation for longer-term value creation, provided the next Scoping Study demonstrates stronger economics and management secures sustainable project funding.

The verdict: Geological momentum is building, with commercial delivery next

Sunstone is entering an important stage of development, supported by a larger Bramaderos resource, encouraging high-grade drilling and improving metallurgical results.

The combination of two substantial Ecuadorian projects provides considerable exploration potential, while the increased Indicated resource strengthens the basis for future development studies.

We are particularly encouraged by the opportunity to improve Bramaderos' economics through higher recoveries and additional resource conversion.

Funding remains the principal risk, and neither project has reached production. Nevertheless, the geological progress provides a stronger platform from which Sunstone can advance its development strategy.

The next major milestones are the updated Bramaderos Scoping Study, further El Palmar drilling results and evidence of a sustainable funding partnership. Together, these developments will help determine whether Sunstone can translate its growing resource base into a commercially viable gold-copper business.