Economic Extraction Assumptions Remain Conceptual Despite Blue Heaven Resource Growth

Updated Mineral Resource Estimate Highlights Growth

Reach Resources Limited (ASX:RR1) has released an updated Mineral Resource Estimate (MRE) for the Blue Heaven deposit within its Murchison South Gold Project near Payne’s Find, Western Australia. The new estimate, prepared by Mining Plus, reports a ~30% increase in contained gold to 80,000 ounces at an improved grade of 3.0 grams per tonne (g/t) gold, up from the previous 61,300 ounces at 2.8 g/t announced in April 2025. This increase follows approximately 5,200 metres of reverse circulation (RC) drilling completed in late 2025.

The updated MRE comprises 844,000 tonnes at 3.0 g/t Au, with 530,000 tonnes classified as Indicated (45,000 ounces at 2.6 g/t) and 314,000 tonnes as Inferred (35,000 ounces at 3.5 g/t). The mineralisation starts from surface, offering potential for shallow, open pit mining development. The deposit remains open along strike and at depth, indicating further growth potential.

Mining and Processing Considerations

The Mineral Resource is constrained within an optimised pit shell based on a gold price of A$4,500 per ounce, below the current spot price of approximately A$6,500 per ounce, which suggests significant upside potential if market conditions persist. Mining assumptions include a cost of A$4.50 per tonne mined, processing cost of A$33 per tonne, a 2.5% royalty, and overall slope angles of 55 degrees. Metallurgical test work completed to date indicates a high gold recovery rate of 95%, supporting the economic extraction assumptions.

The Blue Heaven deposit is located within the granted mining lease M59/769, adjacent to the Great Northern Highway, providing excellent infrastructure access. Processing discussions with third-party operators are ongoing, which could facilitate a low capital expenditure development pathway. The project’s proximity to existing infrastructure and defined zones for resource growth combine to present a robust platform for potential mining operations.

Geological and Drilling Details

The deposit is hosted primarily in hornblende-biotite-quartz-oligoclase tonalite gneiss with gold mineralisation occurring in auriferous quartz veins oriented roughly north-south and dipping steeply southwest. The mineralised shear zones are typically narrow, up to 2 metres wide, with high-grade shoots extending along strike for up to 150 metres. The updated resource model incorporates recent drilling data and maintains the geological framework established in prior studies.

Drilling in 2025 involved 48 RC holes totalling over 5,200 metres, with samples assayed using fire assay methods and quality control measures including certified reference materials, blanks, and duplicates. The drilling data was validated and used to update the mineralisation wireframes and block models, employing Ordinary Kriging estimation techniques. The resource classification reflects drill spacing and geological continuity, with Indicated resources defined by drill spacing better than 20m x 20m and Inferred resources by spacing up to 80m x 80m.

Strategic Implications and Next Steps

CEO Jeremy Bower commented, "This is an excellent result from relatively limited extensional drilling and provides further confidence that the resource can continue to grow as we progress toward development. We now have a resource of 80,000 ounces of gold from surface supported by metallurgical gold recovery of 95%, in close proximity to critical infrastructure, including the Great Northern Highway, nearby processing options and defined zones for further resource growth. These factors combine to present a robust platform for a potential gold mining operation at Murchison South."

This resource update follows recent announcements of high-grade gold zones and extensions at Murchison South, reinforcing the project's exploration upside and development potential. The company recently launched a $3.15 million entitlement offer to fund ongoing exploration and working capital, indicating a strategic focus on advancing the project toward feasibility and production stages. Investors and analysts will be watching for forthcoming feasibility study results and further resource expansions as Reach Resources continues to delineate the deposit’s potential.

For additional context on the company’s recent exploration progress and capital raising activities, see the coverage on Reach Resources’ high-grade gold discoveries at Murchison South and the $3.15 million entitlement offer.