Reach Resources Secures Fully Funded Mining Deal and Boosts Blue Heaven Resource

Fully Funded Pathway to Production at Murchison South

Reach Resources (ASX:RR1) has secured a binding option agreement with Andel Resources granting them exclusive rights to mine and process ore from the Blue Heaven deposit at its Murchison South Gold Project. Andel’s subsidiary, Gylden Resources, will operate the nearby Kirkalocka Mill, roughly 75km away, under a 50/50 net profit share arrangement on an open-book basis. Crucially, Andel will shoulder all upfront pre-mining, mining, haulage, and processing costs, to be repaid from future gold revenues, effectively removing capital risk for Reach.

In exchange, Reach received a non-refundable A$2 million option fee and raised approximately $900,000 from Andel’s strategic share placement, which now represents about 9.4% of Reach’s issued capital. Andel has 180 days to complete due diligence before the Right to Mine and Milling (RTMM) Agreement becomes unconditional. This deal offers Reach a funded route to production, accelerating its development timeline.

Blue Heaven Resource Upgrade Strengthens Project Economics

The Blue Heaven deposit saw its Mineral Resource Estimate (MRE) increase by approximately 30% to 80,000 ounces of gold at an improved grade of 3.0 grams per tonne (g/t), following 5,200 metres of recent drilling. The updated resource includes 45,000 ounces classified as Indicated at 2.6g/t and 35,000 ounces Inferred at 3.5g/t, all near surface and within a granted mining lease. Metallurgical testing confirms a robust 95% gold recovery, supporting the viability of toll milling at Kirkalocka.

This resource upgrade, combined with the RTMM agreement, positions Reach to capitalise on a higher-grade, well-defined deposit with established processing infrastructure nearby.

Strengthened Balance Sheet and Portfolio Simplification

Reach fortified its cash position during the quarter, raising a total of $6.05 million before costs. This includes proceeds from a rights issue and shortfall placement raising $3.15 million, Andel’s $900,000 placement, and the $2 million non-refundable option fee. The funds are earmarked for mining approvals and development activities, accelerating progress toward production at Murchison South.

Additionally, Reach divested non-core lithium assets to Delta Lithium (ASX:DLI) for $800,000, split evenly between cash and shares, terminating their joint venture and shedding future holding costs. This move sharpens Reach’s focus on its flagship gold project while retaining exposure to strategic investments.

Strategic Investment in REEcycle’s Nasdaq Listing

Reach holds a 4.9% stake in REEcycle Holdings Inc, which recently entered a definitive Business Combination Agreement with Hall Chadwick Acquisition Corp (Nasdaq: HCACU), valuing REEcycle at US$400 million. The combined entity is expected to list on Nasdaq upon completion, with at least US$40 million in unrestricted cash to support growth. While Reach was not involved in the deal negotiations, this investment provides optionality in the critical minerals recycling sector.

Cash Position and Operational Outlook

At quarter’s end, Reach held $6.531 million in cash, reflecting strong liquidity to fund near-term activities. Exploration and development expenditure remained modest at $84,000 and $40,000 respectively, focused on advancing the Murchison South project’s development assessment, including field surveys and mine engineering studies.

No material events occurred after quarter end, leaving the company well-positioned to monitor Andel’s due diligence progress and advance towards production milestones.