Terra Metals [ASX: TM1] Update October 2026
Metals & Mining
Southwest Takes Shape as a Large-Scale Discovery Ahead of Maiden MRE
We have revised our target price for Terra Metals (ASX: TM1) to A$0.81 from our May 2026 Report, implying a compelling 461% total upside from the current A$0.15 share price. Terra Metals is advancing the 100%-owned Dante Project in Western Australia’s West Musgrave region, comprising the existing 148Mt Basal Reefs Mineral Resource and the emerging Southwest PGM-Cu-Ni-Co sulphide discovery.
Since our last report in May 2026, Southwest has progressed from an early-stage discovery into a large, increasingly connected mineralised system with a clearer pathway toward resource definition. Drilling has extended mineralisation to more than 1,350m of strike. In contrast, infill drilling, substantial mineralised thicknesses and repeated higher-grade internal reefs have strengthened confidence in scale, continuity and grade potential. With more than 56,000m drilled and a maiden MRE targeted for early 2027, Southwest is becoming an increasingly important component of TM1’s investment case.
Drilling Extends Southwest and Connects the Mineralised System
The most important development has been the continued expansion and definition of Southwest. The latest drilling extended the Southwest Main Sulphide Corridor by ~400m to more than 1,350m of strike, while the system remains open along strike and at depth. Mineralisation is now defined over ~700m across strike and ~750m of demonstrated down-dip extent, with infill drilling between SW5 and SW6 continuing to support interpretation of one large, connected mineralised system. This is important for valuation, as a larger and increasingly continuous mineralised footprint provides a stronger basis for a substantial maiden Mineral Resource. TM1 has consequently shifted from proving the discovery to systematically defining tonnes, grade and continuity, with five rigs active ahead of the maiden Southwest MRE targeted for the start of 2027.
Broad Mineralisation and High-Grade Reefs Support Resource Growth
Recent drilling has further refined Southwest’s geometry and grade distribution. SWRD051 intersected 448m of continuous mineralisation, representing up to ~400m true thickness, while SWRC083 returned 73m from just 12m depth, confirming the system extends close to the surface. SWRD052 strengthened the grade profile with 275m at 0.91g/t 3E and 0.17% Ni, followed by 114m at 0.95g/t 3E and 0.15% Ni, including higher-grade zones exceeding 2g/t 3E. Additional results from SWRD077, SWRD071, SWRD054, SWRD056 and SWDD019 confirmed multiple stacked high-grade PGM reef horizons within the broader mineralised package. The combination of substantial thickness, shallow mineralisation and recurring higher-grade reefs supports the potential for a substantial Mineral Resource and greater mine-planning flexibility.
Maiden MRE Is the Key Near-Term Re-Rating Catalyst
Following recent milestones, we value TM1 at A$0.71 in our base case (389% upside) and A$0.92 in our upside case (533% upside), relative to the current share price of A$0.15. Using the midpoint of these scenarios, we derive a P/NAV of 0.18x. TM1 has shifted from proving the Southwest discovery to systematically defining tonnes, grade, and continuity ahead of a maiden MRE targeted for early 2027. Five rigs remain active, with more than 56,000m of diamond drilling and reverse-circulation drilling completed and ~24,000m reported, leaving a substantial pipeline of >40,000 assays (in the lab) and further resource-definition work ahead. Completed heritage surveys have also opened additional areas for drilling. With A$75.1m in cash and a strengthened leadership team, TM1 is well funded to maintain the programme. We see ongoing assay results, the maiden MRE and subsequent metallurgical work as the key catalysts for further de-risking and potential re-rating.