Resources & Energy Group Limited (REZ) has secured approval to expand gold vat leach production at its East Menzies Gold Project, transitioning from trial to commercial scale. The company also announced a maiden JORC 2012 Inferred Mineral Resource at Gigante Grande, underpinning future growth.
- DMPE approval for full-scale vat leach production at Maranoa Deposit
- Construction of eight new vat leach cells increasing capacity to ~40,000 tonnes
- Maiden Inferred Mineral Resource at Gigante Grande – 1.39Mt @ 0.91g/t Au for 40,700oz
- Ongoing soil sampling and drill planning to refine exploration targets
- Quarter-end cash position of $1.05 million supported by capital raise and asset sale
Operational Milestone at East Menzies
Resources & Energy Group Limited (ASX, REZ) has marked a significant step forward at its East Menzies Gold Project in Western Australia, receiving regulatory approval from the Department of Mines, Petroleum and Energy (DMPE) to transition from trial to full-scale vat leach gold production at the Maranoa Deposit. This approval enables the construction of eight additional vat leach cells, each with a capacity of approximately 5,000 tonnes, expanding total processing capacity to around 40,000 tonnes. This scale-up is expected to materially increase gold output compared to the initial 5,000-tonne trial program, positioning REZ to establish a reliable and sustainable production platform.
Maiden Mineral Resource at Gigante Grande
Complementing the operational progress, REZ announced the establishment of a maiden JORC 2012 Inferred Mineral Resource at the Gigante Grande prospect within the East Menzies Project. Independently estimated by ERM Consultants, the resource totals 1.39 million tonnes grading 0.91 grams per tonne gold, containing approximately 40,700 ounces of gold. The mineralised system extends over a 6-kilometre corridor and remains open for expansion both laterally and at depth. Notably, the resource includes both lower saprolite supergene and in situ granite-hosted mineralisation, offering multiple pathways for near-surface development and extraction.
Exploration and Growth Initiatives
REZ is actively advancing exploration with a soil sampling program underway, targeting untested zones across three key areas within the East Menzies tenements. Approximately 1,500 samples are being collected using the CSIRO UltraFine+ method to enhance detection sensitivity for gold and associated pathfinder elements. This geochemical data will integrate with existing drilling results to refine structural models and prioritize high-value drill targets for the planned Q2 2026 drilling campaign. Heritage surveys and regulatory approvals for drilling at Gigante Grande and Goodenough are progressing, setting the stage for a seamless transition to expanded exploration activities.
Financial Position and Outlook
At the end of the September quarter, REZ reported a cash balance of $1.05 million, bolstered by a successful capital raise and the sale of the Mount Mackenzie Project. Quarterly operational and exploration expenditures totaled $928,000, representing a significant portion of cash reserves. The company anticipates that forthcoming gold sales from the Maranoa trial program, combined with disciplined cost management, will sustain its financial position through the December quarter. Additionally, REZ holds a substantial equity position in QMines Limited, valued at approximately $1.78 million, subject to escrow.
Strategic Implications
The transition to full-scale vat leach production and the confirmation of a sizeable maiden resource at Gigante Grande collectively enhance REZ’s operational and growth profile. These developments not only underpin near-term production potential but also provide a robust foundation for continued exploration and resource expansion across the East Menzies Gold Project. As REZ moves forward, the integration of exploration success with operational scaling will be critical to establishing a sustainable, self-funding gold production business in a highly prospective region.
Bottom Line?
REZ’s full-scale production approval and maiden resource set the stage for a pivotal growth phase, with upcoming drilling and gold sales poised to test the company’s momentum.
Questions in the middle?
- How quickly can REZ ramp up production to full capacity and what will be the impact on cash flow?
- What are the prospects for expanding the Gigante Grande resource beyond the current inferred estimate?
- How will ongoing exploration results influence REZ’s capital requirements and funding strategy?