Reach Resources has boosted its Blue Heaven gold resource by roughly 30% to 80,000 ounces, supported by strong metallurgical results and a newly granted mining lease, while progressing a $3.15 million rights issue to fund further exploration and development.
- Blue Heaven resource expands to 80,000 oz gold at 3.0 g/t
- Second mining lease consolidates key deposits at Murchison South
- Metallurgical tests confirm 95% gold recovery supporting toll milling
- Rights issue underway to raise up to $3.15 million
- High-grade assays and drilling extend mineralisation along strike and depth
Blue Heaven Resource Surges 30 Percent to 80,000 Ounces
Reach Resources Limited (ASX:RR1) has reported a significant ~30% increase in its Blue Heaven Mineral Resource Estimate (MRE) at the Murchison South Gold Project, lifting the total to 80,000 ounces of gold at an average grade of 3.0 g/t. This update, announced shortly after the March quarter, reflects 844,000 tonnes of mineralisation from surface, with 62.8% classified as Indicated, underpinning confidence in the resource continuity and potential for shallow open pit mining.
The resource upgrade was achieved with only about 5,200 metres of reverse circulation drilling, translating to a discovery cost of just $49 per ounce for the incremental resource. This efficient growth highlights the project's exploration upside, especially given the gold mineralisation remains open along strike and at depth. The previous MRE stood at 61,300 ounces, so the jump to 80,000 ounces marks a meaningful step forward for Reach's flagship asset.
Second Mining Lease Consolidates Key Deposits Along Primrose Fault
Adding to the project's momentum, Reach secured a second mining lease, M59/786, in January 2026. This lease consolidates the East Daffodil gold deposit with the former Pansy Pit and Shamrock Pit areas, all situated along the structurally significant Primrose Fault. Historical drilling at East Daffodil is shallow, with a maximum depth of only 29 metres, but it ended in gold mineralisation, suggesting substantial upside potential at depth.
The new lease lies adjacent to the Blue Heaven deposit and the historic Daffodil open pit, enhancing the potential for two viable mining zones within a high gold price environment. This consolidation strengthens Reach's development pipeline and supports ongoing exploration targeting high-priority growth areas along the fault.
Exploration Success with High-Grade Extensions and Rock Chip Assays
During the quarter, Reach confirmed multiple new high-grade gold lodes at Blue Heaven from a 48-hole RC drill program, with assays extending mineralisation along strike, at depth, and beneath historic workings. Notable intercepts included 3 metres at 5.8 g/t Au and 21 metres at 1.4 g/t Au with higher-grade intervals, reinforcing the deposit's potential to grow further.
Complementing drilling results, a rock chip sampling program identified high-grade gold assays up to 31 g/t Au outside the current MRE, particularly around the Jacamar and Shamrock deposits. Five anomalous zones were flagged for follow-up drilling, indicating clear targets for resource expansion beyond the current footprint.
Metallurgical Testwork Supports Toll Milling Strategy
Metallurgical test results released earlier in the quarter showed gold recoveries between 95.2% and 97.4% using gravity and cyanide leach methods on composites representative of early production. The ore is free-milling and relatively soft, with favourable processing characteristics that support the potential for toll milling or ore purchase arrangements with third-party operators within trucking distance.
Capital Raising to Fund Exploration and Development
To support ongoing exploration and development at Murchison South, Reach launched a non-renounceable entitlement issue aiming to raise up to $3.15 million. As of late April, the company had received $826,000 before costs, with the offer remaining open until 21 July 2026. The funds will primarily be allocated to advancing the Murchison South Gold Project, evaluating new opportunities, and general working capital.
Despite a cash balance of $434,000 at the end of March, the company expects reduced cash outflows in the coming quarter as drilling campaigns conclude and assay costs taper off. The entitlement issue is a critical step to extend the cash runway and maintain momentum on exploration and development activities.
Investment in REEcycle Holdings and Market Developments
Reach holds a 4.9% stake in REEcycle Holdings Inc, a company focused on recycling rare earth elements from permanent magnets used in electric vehicles and renewable energy technologies. REEcycle is pursuing a proposed de-SPAC transaction with Hall Chadwick Acquisition Corp (Nasdaq: HCACU), though the deal remains non-binding and subject to various conditions, adding an element of uncertainty to this investment.
The recent resource growth and exploration success at Murchison South, combined with metallurgical robustness and strategic capital raising, position Reach Resources to advance its gold development ambitions. Investors will be keen to watch how the company leverages these gains and manages its funding needs amid evolving market conditions.
Reach’s progress builds on earlier announcements, including the 30% resource increase and the $3.15M entitlement offer, underscoring a clear trajectory of growth and capital management. Meanwhile, the high-grade extensions from drilling and rock chip sampling echo findings from the high-grade gold extensions and high-grade assays reported earlier this year, reinforcing the project’s exploration upside.
Bottom Line?
Reach Resources’ resource upgrade and funding efforts set the stage for potential development progress, but the company’s cash position and reliance on successful capital raising remain key factors to monitor.
Questions in the middle?
- Will further drilling confirm extensions to the Blue Heaven resource beyond current estimates?
- How will the proposed de-SPAC transaction impact Reach’s investment in REEcycle Holdings?
- Can Reach secure processing agreements leveraging its strong metallurgical results to advance production?