REZ’s Western Australia gold story resonates strongly with investors
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Special Report: Resources & Energy Group’s recent exploration success at the historic Menzies gold field in Western Australia has translated into plenty of investor interest in the company’s latest capital raising.
Under the leadership of Managing Director Richard Poole, Sydney based REZ (ASX: REZ) announced this morning it had raised $3.3 million through a share placement to professional investors priced at 7.5c a share and with an attaching option for every four shares subscribed.
The options carry an exercise price of 20c and expire on 31 October 2022.
The company had initially set out to raise $2 million but was inundated with demand and closed the book heavily oversubscribed within 90 minutes.
Such appetite from investors is not particularly surprising considering REZ’s share price surged more than 200% to 10.5c on the ASX of a whopping 574.3 million shares last week after the company released a new set of exploration results from the Gigante Grande prospect at its East Menzies Gold Field Project.
Among the highlights of the results was a “bonanza” hit of 1m at 76.4 g/t Au within a broader interval of 20m at 5 g/t Au from a depth of 71m.
“The strong support for the placement reflects the enormous excitement the Gigante Grande results have generated and the growing interest and certainty that there are significant gold resources in the East Menzies Gold Field tenements,” REZ managing director Richard Poole said.
Funds from the placement will primarily be used to progress the current exploration program at East Menzies, while a smaller amount will be allocated to continuing development of the Mount Mackenzie gold and silver project in Queensland Australia.
REZ has to date received results from five out of 32 reverse circulation (RC) holes drilled at East Menzies testing 2.5km by 400m in regolith gold anomalies. Four of those holes intercepted significant gold mineralisation.
The discovery of high-grade mineralisation below the regolith at Gigante Grande is another example of the Western Australia goldfields maintaining exceptionally high exploration appeal despite being well trodden in most parts.
Located 130km north of Kalgoorlie, gold was first mined at Menzies before the turn of the 20th century.
The REZ geological team led by Mike Johnstone believes there is the potential to outline up to 500,000 oz in resources in this area alone.
The western side of the project features a number of historic operations on granted mining leases, which, according to the company, represent an opportunity for near-term cashflow.
Any cash generated from returning historic operations to small-scale production would likely be directed into funding exploration on the broader East Menzies tenements.
This story was developed in collaboration with Resources & Energy Group, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.