REZ takes first step to develop its Central West project, investigating early stage gold mining options following Goodenough resource upgrade
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Special Report: REZ has paved the way for it to start looking at the potential for early stage gold mining with the upgrade of the resource at its Goodenough project in Western Australia.
Resources and Energy Group (ASX:REZ) has upgraded the resource at its Goodenough project, part of the East Menzies Gold Field project in WA, to 42,700oz.
The news edged shares up even further on Tuesday to an intra-day peak of 9.6c – a 10.3 per cent gain over the previous day.
Resources and Energy Group (ASX:REZ) share price chart:
The higher confidence indicated resource totals 633,800 tonnes at 1.84 grams per tonne (g/t) for 37,500oz of contained gold, while the inferred resource stands at 81,900t at 1.99g/t for 5,200oz of contained gold.
The Goodenough resource is located on a mining lease in the central west part of the East Menzies Gold Field project – REZ recently made a new, extremely high-grade gold discovery at the Gigante Grande prospect on the Eastern side of the project.
The resource upgrade marks the start of the development of the central west zone as one of REZ’s secondary projects and will be followed up by some additional drilling with an aim of expanding the known resource substantially.
The updated resource will form the basis for mine planning work, including pit optimisation to investigate early stage “campaign”-style open pit mining options.
There is also the potential for a larger mineralised footprint, with the modelling work undertaken by REZ also identifying areas that will benefit from peripheral and deeper drilling.
In particular, in the southern‐most parts of the project area, there is potential to increase the amount of mineralised material in the vicinity of the 4 o’clock line of workings.
The resource is for the most part “open” to the south, which just means REZ hasn’t yet found the end of this potentially big system.
The company has already drilled two holes in the vicinity of the 4 o’clock line of workings to test this concept and is awaiting results.
REZ is also waiting on the results of recent drilling at the Gigante Grande prospect and the Chronos prospect, which are expected within the next 10 days.
Drilling at the Gigante Grande prospect delivered a peak high-grade hit of 1m at 76.4g/t included in an interval of 20m at 5g/t from a 66m mineralised zone starting at just 71m.
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.
That hit sent shares up nearly 230 per cent following the news. Broker Barclay Pearce is predicting REZ shares will hit 15c within 12 months.
That discovery is significant for REZ because it demonstrates 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.
REZ has previously identified the potential to find large mineral resources between 150,000oz and 500,000ozin the eastern area and has stated it is chasing a 1 million oz find.
This article was developed in collaboration with Resources and 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.