REZ takes Maranoa closer to gold production with funded mining deal

Rembrandt takes on Maranoa capital burden

Resources & Energy Group Limited (ASX:REZ) has moved its Maranoa gold deposit from a proposed development into a funded tribute mining arrangement, with Rembrandt Mining responsible for 100% of drilling, mining, processing and rehabilitation capital. REZ retains ownership of the mining lease and its legal operator designation, while Rembrandt will act as contract operator and manage the operational and site compliance responsibilities.

The commercial structure is designed to limit REZ’s upfront funding requirement. Operating costs are recovered before the profit split, which starts at 50/50 at a gold price of A$3,000 an ounce and steps to a 60/40 split in REZ’s favour at A$7,000 an ounce or above. REZ will also receive a management fee of A$200,000 a year plus GST, treated as an operating cost. The arrangement leaves REZ with no capital contribution unless exploration defines a 300,000-ounce-plus inventory, at which point a larger carbon-in-pulp plant would be co-funded equally.

The agreement follows the earlier Maranoa mining agreement, under which Rembrandt was also identified as funding all capital expenditure. Rembrandt has commenced procurement of a mobile modular mill for processing at the Granny Venn site, with on-site vat leaching retained as a fallback option. The filing does not provide a production start date, expected output or forecast operating margin, so the key test now shifts from deal structure to execution.

High-grade Maranoa drilling supports mine planning

Grade control drilling beneath the historic Maranoa workings produced some of the report’s strongest numbers: 2 metres at 15.84 grams per tonne gold from 57 metres and 4 metres at 10.38 grams per tonne from 81 metres. The nine-hole July program covered 614 metres, with mineralisation hosted in quartz veins between 0.5 and 2.5 metres thick.

REZ has stressed that these results are intended to inform mine planning rather than revise the existing resource. Maranoa still carries an inferred JORC resource of 46,000 tonnes at 5.7g/t gold for 8,000 ounces. A further 1,200 to 1,500 metres of grade control drilling began in September to extend the pattern south along the historic workings, while geological mapping is being used to generate additional targets.

The results repeat the high-grade intercepts reported in the Maranoa grade control drilling, which included the same 2-metre and 4-metre intervals. That continuity is relevant to selective mining, but the company has not yet converted it into a revised resource, a mine schedule or a production estimate.

Goodenough drilling feeds a new resource estimate

At Goodenough, a nine-hole, 798-metre RC program extended drilling around the existing resource and returned 9 metres at 3.97g/t gold from 141 metres, including 1 metre at 25.5g/t. The program also confirmed multiple near-surface mineralised intercepts west-northwest of the resource, although REZ said results were variable and further drilling is needed to the south and south-west.

The existing Goodenough resource stands at 1.36 million tonnes at 1.40g/t gold for 61,200 ounces. REZ plans to incorporate the new drilling, a recently flown LIDAR survey and geological data into an updated JORC 2012 estimate, alongside an assessment of near-term development and mining restart opportunities. A re-sampled historical hole returned 5 metres at 3.30g/t, including 1 metre at 11.6g/t, but the company said sample-quality limitations prevent those results from being used directly in a future resource estimate. A twin hole is planned.

The Goodenough work extends the Goodenough drilling results, which highlighted the 9-metre intercept and the planned resource update. The forthcoming estimate should provide a more meaningful measure of the exploration results than individual intercepts alone.

Gigante Grande expands the exploration map

Single-metre re-sampling at Gigante Grande confirmed gold in five of six holes, including 2 metres at 4.20g/t from 152 metres in the Southern Extension, about one kilometre south of the current resource. At the resource’s northern edge, drilling returned 18 metres at 0.65g/t, including 9 metres at 1.10g/t, while a previously unreported 2023 hole at Kota Paxi returned 1 metre at 2.07g/t.

REZ said the Southern Extension mineralisation supports its Mining Lease Application MLA29/437. The company plans a broader exploration program along the Gigante Grande trend and a small orientated diamond drilling campaign to improve its understanding of the structural and lithological controls. The current Gigante Grande resource remains an inferred 1.39 million tonnes at 0.91g/t for 40,700 ounces.

Cash position improves only with tax refund

REZ ended September with A$734,000 in cash, down from A$872,000 at the end of June. The quarter received a A$428,266 R&D tax refund linked to the prior year’s vat leach work, leaving reported net operating cash flow at A$34,000. Excluding that one-off refund, the company says operating and exploration outflows were approximately A$564,000.

Exploration and evaluation spending totalled A$348,000, while REZ paid A$178,000 to directors for work associated with exploration activities. The company also holds 33 million QMines Limited (ASX:QML) shares valued at approximately A$2.1 million based on a 6.3-cent market price. No gold was produced during the quarter, and the filing does not set out a timetable for first production at Maranoa.