REZ is now a miner with Granny Venn restart
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And just like that REZ has swiftly gone from explorer to miner, more quickly than most.
Sydney-based Resources & Energy Group (ASX:REZ) completed the first drill and blast operations earlier this week at its Granny Venn gold mine in Western Australia.
The news sent shares up over 10% on Thursday morning.
Less than a month ago REZ revealed it had been given the greenlight by the WA government to restart mining at Granny Venn, where no mining activity has taken place in 23 years.
“The commencement of mine operations at Granny Venn is an important milestone for the company and is a credit to BM Mining who are managing operations,” executive director Richard Poole said.
“Since acquiring the East Menzies gold project in late 2019, REZ has rapidly moved to assess near-term production opportunities, whilst continuing to investigate greenfields and brownfields exploration targets with a view to discovering 1-million-ounces plus of gold.”
REZ has set itself a near-term target of mining 120,000 tonnes of ore at an average grade of 2.3 grams per tonne (g/t) to produce 8,800oz of gold.
At today’s high Aussie dollar gold price, that would fetch a very cool $21.2m, nicely boosting REZ’s coffers to help fund its continued exploration.
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 gold price is now 5x that.
And making it even more lucrative for REZ is the fact that under the profit-sharing deal with BM Mining, 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.
The ore is slated to be trucked out of the pit on Friday, with the first batch of gold production on track for delivery in September.
The initial production campaign is scheduled to be completed in late December.
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.
Richard Poole said there are two areas currently being probed for resource growth – Gigante Grande along the east side of the project area, which has delivered very encouraging results, and Springfield on the west.
“The restart of mining at Granny Venn represents the continued unlocking of the Menzies region, with the project representing a collective 90sqkm of surface area for REZ,” Richard Poole explained.
“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.”
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.