Special Report: REZ has hit bonanza-grade gold paydirt in a historic Western Australian goldfield that is fast proving to be “one of Australia’s best and most overlooked exploration target areas”.
Initial reverse circulation drilling at Resources & Energy Group’s (ASX:REZ) Gigante Grande prospect, part of the East Menzies project, has delivered a peak high-grade hit of 1m at 76.4 grams per tonne (g/t) from a 66m mineralised zone starting at just 71m.
That intercept also included a hit of 20m at 5g/t from 116m.
To put that into context, anything around 5g/t is generally considered high-grade and while there is no official definition for a ‘bonanza’ grade (just a way of describing speccy finds), it’s safe to say the 76.4g/t hit would definitely make it into the bonanza category.
The new discovery is significant for REZ because these new results demonstrate strong potential for Gigante Grande to host a very large mineralised system.
REZ was drill testing the previously reported 2.5km by 400m gold in regolith anomalies.
The discovery of high-grade mineralisation below the regolith has the potential to lead to a new economic gold deposit that is located less than 130km north of Kalgoorlie and within the eastern part of the historic Menzies gold field.
Results have so far been received for five holes of the initial 32-hole program and significant intervals of gold mineralisation have been found in two of the holes.
“This is very encouraging that in the first five holes we managed to get 76.4g/t, and on either side of that is gold,” executive director Richard Poole said.
“So what it’s showing is that there is a significant body of gold mineralisation with some good high grade width and, although there’s some lower grade and high grade through it, that body of gold mineralisation of 66m is just highly encouraging. It gives us great hope that there is a commercial operation out there and it could be very significant.”
Paired with an earlier hole which had a 34m mineralised interval with indications of 34m at 0.29g/t this takes the total thickness of the mineralised zone to 100m.
Plenty of exploration upside
A second hole located 490m south-southeast of the hole that returned the top hit has also intersected a 19m thick mineralised interval from 34m. A peak hit of 1m at 13g/t, including 8m at 3.02gt, from 35m was recorded in the second hole and 2m of this counted as zero g/t due to a shortfall in material for immediate testing.
Adding to the upside exploration potential, mineralisation is again not limited to just the high-grade zones, with lower indications of 0.1g/t to 1.15g/t occurring throughout.
“This set of results supports the overwhelming evidence that the East Menzies goldfield is one of Australia’s best and most overlooked exploration target areas,” Poole said.
“Given its huge historical yield, rich history of gold production and with over 400 old workings, we are very excited.
“We are very much looking forward to continuing to explore and develop our 100sqkm package with multiple prospects at the East Menzies goldfield.”
Located in in the historic Menzies Goldfields, the project is an advanced exploration play with a rich history of gold mining. Gold was first discovered in Menzies in 1894 and at one stage the town had 13 pubs and 2 breweries. In a booming gold market, with a current market cap of ~$12m, REZ appears to offer plenty of leverage to drilling success.
The Gigante Grande is one of a number of prospects acquired by REZ in late 2018.
The East Menzies Gold Field project includes a mix of near-term redevelopment opportunities and large, greenfields (unexplored) targets.
REZ has previously identified the potential to find large mineral resources between 150,000oz and 500,000oz in the eastern area and has stated it is chasing a 1million oz find.
The East Menzies area has been mined in the past, and is host to three existing open pits and an underground mine, but because Gigante Grande mineralisation is hosted in granite and covered by regolith it was overlooked by the early miners.
“The area we’re in is a little bit further away from Menzies and by that I don’t mean very far only 5 or 10km, but for the old guys it was a lot further to look and the problem was it was hidden under extensive cover rocks ,” Poole said.
“Anecdotally its thought once old timers got below about 15-18g/t they didn’t bother with it.”
Aircore and rotary air blast drilling in August confirmed multiple +100 parts per billion regolith gold trends that delivered a peak assay of 2.24g/t with potential to represent a large gold system, possibly as long as 2.5km.
This prompted REZ to quickly pivot to reverse circulation drilling to test these regolith anomalies at depth.
In September, an early stage drilling program uncovered at least 10 large scale targets on the eastern side.
Meanwhile, the western side of East Menzies — which includes a number of historic mining operations on granted mining leases — represents an opportunity for near-term cashflow.
Drill results to continue
REZ is expecting more drilling results over the next couple of weeks.
These will include results from the Chronos and Goodenough prospects.
REZ also plans to follow up these latest results at Gigante Grande.
“We are planning to go back and consolidate on the fantastic results we have seen so far,” Poole explained.
“Clearly five or so holes weren’t enough, and we need to head back out for another drilling program and see if we can firm up the size and start to step it out and see what we find.
“We’ve got probably four or five what you’d call significant active project areas that we’re doing exploration on at the East Menzies Gold Field project.”
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.