How Is REZ Scaling Gold Production at East Menzies Amid Processing Challenges?

East Menzies Gold Production Milestones

Resources & Energy Group Limited (ASX, REZ) has marked significant operational progress at its flagship East Menzies Gold Project in Western Australia during the June 2025 quarter. The company completed its second gold doré pour, minting 34.137 ounces of gold at the Perth Mint, generating approximately $160,000 in sales from the first two shipments. This achievement underscores REZ’s transition from trial mining to scalable production, leveraging its onsite vat leach processing facility.

Despite initial setbacks caused by higher-than-expected clay and fines content in the ore, which affected vat permeability and slowed processing, REZ swiftly implemented technical adjustments. These included sparging vats to break up compacted clay layers and agitating upper ore layers to restore permeability, resulting in improved gold recovery and processing efficiency. The company is now preparing for a third gold pour, with refinements aimed at accelerating production rates.

Strategic Divestment and Financial Strengthening

In a strategic move to concentrate on its Western Australian operations, REZ completed the sale of its Mount Mackenzie Gold Project in Queensland to Mines Limited (ASX, QML) post quarter-end. The transaction brought in $1 million in cash proceeds and 33 million shares in QMines, allowing REZ to retain exposure to Mount Mackenzie’s future development through its shareholding. This divestment has bolstered REZ’s balance sheet, providing financial flexibility to support expansion efforts at East Menzies.

Complementing this, REZ secured firm commitments for a $1.1 million share placement, attracting strong support from professional and sophisticated investors. The capital raised is earmarked for ramping up gold production, advancing exploration of priority targets, and expanding the vat leach operation. This funding round positions REZ well to accelerate its operational and exploration programs in the coming months.

Path to Self-Sufficient, Low-Cost Gold Production

REZ’s operational model distinguishes itself by maintaining independence from third-party processing mills, a notable advantage amid constrained mill capacity in the Goldfields region. The company is awaiting regulatory approval from the Western Australian Department of Mines, Industry Regulation and Safety (DMIRS) to commission up to 10 additional vats. These new vats will incorporate lessons learned from the trial phase, aiming to enhance percolation, reduce cycle times, and increase gold recovery rates.

With a robust pipeline of high-grade feedstock within the East Menzies tenement package, including deposits such as Granny Venn, Goodenough, and Maranoa, REZ is strategically positioned to scale production. The company’s previous campaign at Granny Venn yielded 8,700 ounces of gold and $23 million in revenue at lower gold prices, demonstrating the project’s potential. Current elevated gold prices and the low-cost vat leach process further enhance REZ’s prospects for sustainable, cash-generative operations.

Looking Ahead

REZ’s focus on operational flexibility, cost control, and strategic asset management sets the stage for a new growth phase. The company’s strengthened financial position and ongoing exploration initiatives underpin its ambition to deliver long-term shareholder value through expanded gold production and resource development. Investors will be watching closely as REZ moves toward regulatory approvals and scales its processing capacity at East Menzies.