Meeka's Underground Pivot: A Turnaround Story for Liberal Investors

Meeka (MEK) used its presentation at the Noosa Mining Conference 2026 to outline a sharp shift in strategy after a difficult six months. Management said recent underperformance was tied to weak open-pit productivity, but it argued the move to underground mining is already improving the outlook. The stock has declined 66% over the past six months to 0.06 USD, now trading near its 52-week low. Despite the operational challenges, InvestingPro analysis suggests the stock may be undervalued at current levels, appearing on the platform's Most Undervalued list.

The company said it has finished most of a two-year investment phase and is now moving toward lower capital spending, higher grades and stronger cash flow. It also pointed to growth at its Andy Well and Turnberry underground mines, plus exploration upside along a wider mineralized corridor.

What went wrong with the open pit?

Management opened the presentation by acknowledging the recent weakness in the business.

“The first thing that I want to talk to this morning is our operating performance over the last six months, which quite frankly has been disappointing. We've underperformed our own expectations and the expectations of our shareholders.”

The company said the share price decline over the past six months reflects the operational issues. An InvestingPro tip confirms the stock has taken a big hit over the last six months, with year-to-date returns down 65%. It said the main problem was open-pit mining productivity not matching plan. June-quarter results were heavily influenced by open-pit mining, which underperformed on productivity.

How is Meeka fixing its productivity problem?

Meeka said the business is moving from contractor-led open-pit mining to an all-underground model. The open-pit contractor is demobilizing from site. Underground mining is run on an owner-operator basis. Management said underground work has not shown the productivity problems seen in the open pit. It also said owner-operated mining gives the company a cost advantage over contractor use.

Andy Well: The first underground mine

Andy Well is the first underground mine and has been in development for about 12 months. Stoping began late in the previous quarter and is now ramping up. Mining is focused on the upper 200 meters below surface during the first 12 to 18 months. The mine uses existing decline infrastructure, which helped keep the start-up relatively quick and low cost. The orebody consists of three sub-parallel sheeted quartz lodes about 200 meters apart. Grades are in double digits, with resources above 15 grams per ton described as the highest-grade material. Wilbur was the earlier development focus, while Judy North, described as a completely virgin ore body, was accessed in the previous quarter. Suzy is expected to be accessed later this year. Management said the high-grade shoots show very good down-plunge continuity. Drilling suggests grades improve below the current mining levels. Further drilling is planned this year to expand the resource base.

Turnberry: The second underground mine

Turnberry is the company's second underground mine and is moving from open-pit operations into underground development. Open-pit mining ended about one week before the presentation. The project is already supported by administration, workshop and other infrastructure from the open-pit operation. Civil works for underground support and mine services are complete. Portal cutting is expected in September. Development is planned through the December quarter. First ore delivery to the mill is expected by early next year. Management described the mine plan as simple, with a top-down mining approach. Ground conditions were said to be very good, allowing a straightforward mesh-and-bolt support regime. The company said development should move quickly because turnaround times are short. Turnberry differs from Andy Well in style and scale. Meeka said Turnberry has broader zones of high-grade gold, and recent drilling showed strong down-plunge continuity well below the current reserve and mine plan.

Exploration: A 5-kilometer corridor of potential

Beyond mining, Meeka said it is starting to reinvest in organic growth now that cash flow is beginning to emerge. Over the past three to four years, the company focused on drilling out the open pit and a limited underground resource at Turnberry and St Ann's. The shear zone between Turnberry and St Ann's, about three kilometers apart, had not previously been systematically explored. Broad reconnaissance drilling is now underway, with drill lines spaced about 200 meters or more apart. Early results have identified broad zones of gold, similar to the early stage at Turnberry. The company said there is a three-kilometer search space between Rosapenna and the southern areas that could host more mineralization. Management plans to follow up with infill and denser drilling around the current results. Geologically, the company said the corridor from Turnberry to St Ann's shows a change from a cooler mineralizing environment, marked by arsenopyrite, to a hotter one with pyrite. At Turnberry Central, drilling has shown even hotter conditions, with small amounts of chalcopyrite that may point to magmatic involvement. Management said the mineralized system extends about five kilometers from northern Turnberry to southern St Ann's and remains open to the north and south. It also said the broader Archean greenstone belt offers more than 15 kilometers of additional potential extension to the south.

Financial outlook: Lower spending, higher cash flow

Meeka's near-term message was that production and cash flow should improve as underground material replaces open-pit ore. A material increase in underground ore is expected to reach the mill this quarter. By early next year, the mill is expected to be fed almost entirely from underground sources. By the end of the financial year, the mill should be supplied entirely by the two underground mines. Higher grades and better productivity are expected to support stronger output. Lower capital spending should also help cash flow. The company maintains a healthy current ratio of 2.89 and a gross profit margin of 61%, while trading at a P/E ratio of 12.95. InvestingPro data shows net income is expected to grow this year, supporting management's optimistic outlook.

What does this mean for investors?

For investors, the key question is whether the underground ramp-up arrives quickly enough to offset the recent decline in performance and market value. Meeka is betting that the answer will be yes, with higher-grade ore, lower spending and new discoveries all expected to support the next phase of the business. The presentation was measured and technical. Management did not try to minimize the recent weakness, but it presented the underground transition as a clear fix for the issues seen in the open pit. Management said the drivers of underperformance are well understood. It said underground mining has not shown the same productivity problems. It emphasized cost advantages from owner-operated mining. It highlighted strong grades, good ground conditions and down-plunge continuity as signs of operational and geological strength.

Frequently asked questions

Why did Meeka's stock fall 66%?

The stock decline reflects operational underperformance tied to weak open-pit mining productivity, which the company is now phasing out.

What is Meeka's new strategy?

Meeka is pivoting entirely to underground mining, moving from contractor-led open-pit operations to owner-operated underground mines.

When will the underground mines start producing?

Andy Well is already ramping up stoping. Turnberry is expected to deliver first ore to the mill by early next year.

Is Meeka a good investment?

InvestingPro analysis suggests the stock may be undervalued at current levels, with net income expected to grow this year. However, the key risk is whether the underground ramp-up happens quickly enough.