REZ gets thumbs up to restart gold mining at Western Australia’s Granny Venn
REZ will bring the Granny Venn mine back to life in late June having now been given the go ahead by the Western Australian government.
Sydney based Resources & Energy Group (ASX:REZ) has locked in approval to restart mining at the Granny Venn gold mine in Western Australia.
“The resumption of operations represents the first significant mining activity to take place in the East Menzies Goldfield since 1998,” executive director Richard Poole said.
The project being green lit is a huge win for REZ as it represents the continued unlocking of the Menzies region with the project representing a collective 90km2 of surface area for the ASX listed company. As Richard Poole explains.
“This is a significant milestone for REZ as we continue to prove up the potential of our large landholding at East Menzies to become a tier one mining operation.
As explained by Richard Poole this success will allow Sydney based REZ to support other areas that represent further potential.
“Granny Venn will provide REZ with early cash flow to support ongoing exploration on our other highly prospective prospects, which includes the potentially very large Gigante Grande.” -Richard Poole
The news pushed shares up nearly 17 per cent to an intra-day high of 3.5c on Wednesday morning.
Resources & Energy Group share price chart
Mining will be undertaken by BM Mining, which REZ brokered a very lucrative profit-sharing deal with back in mid-March.
BM Mining, which is part of the BM Geological Services (BMGS) group of companies that have been active in the mining industry in the Goldfields of Western Australia since 2003, recently acquired a small open pit mining fleet which has positioned the company to achieve low cost and efficient production.
Recent successful projects BM Mining has been involved in include Hawthorn Resources’ (ASX:HAW) Trouser Legs open pits, Horizon Minerals’ (ASX:HRZ) Boorara open pits and Orminex’s (ASX:ONX) Comet Vale underground operations.
Under the deal brokered, REZ didn’t have to shell out a dime to get Granny Venn back in operation, with BM Mining covering the $3m capital outlay required.
Resource modelling and mine planning studies have Granny Venn, part of REZ’s flagship East Menzies project in Western Australia, pinpointed as one of five areas of interest to exploit the current indicated and inferred resource.
The original Granny Venn open pit, which was developed by Money Mining and Paddington Gold in 1997-1998, was based on a pit design optimised at a gold price of $454/oz.
The optimised pit recovered 532,000oz of ore which was processed at the Paddington gold mill at an overall head grade of 3.52 grams per tonne (g/t) with 94 per cent recovery of contained metal for about 60,000oz of gold.
Today’s Australia’s dollar gold price is up at around $2,414/oz, which is more than 5x the price it was when Money Mining and Paddington Gold were developing the project.
This makes gold grades of 1-2g/t economic, especially when the ore is amenable to low-cost conventional carbon-in-leach processing and a fit-for-purpose mill is already in place.
REZ will broker a toll milling agreement to process the Granny Venn gold through the Lakewood Mill. The deal is now at an advanced stage of completion, REZ says.
The company recently completed grade control drilling ahead of the restart of mining which delivered peak assays of 11m at 5.46g/t from 23m, 14m at 2.15g/t from 22m and 15m at 3.43g/t from just 3m.
This article was developed in collaboration with Resources & Energy Group, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.