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RESOURCES & ENERGY GROUP LIMITED Capital/Financing Update 2021

Sep 28, 2021

65687_rns_2021-09-28_65f5dbc1-00c9-4d20-87b1-499ad57235e5.pdf

Capital/Financing Update

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ASX/Media Release 29 September 2021

More Nickel at Menzies, Peak Historic results of 12m @1.22% and 7m @1.46% Ni

Resources & Energy Group Limited (ASX: REZ or the Company) are pleased to provide an update for ongoing Nickel investigations at the Springfield and Cepline Prospects.

  • Further research by the Company has identified additional mineral exploration results at the Cepline Prospect which support the initial findings of Nickel mineralisation by BHP in 1986.
  • Air Core drilling by Proto Resources in 2008 reported a peak assay of:
    • 12m @1.22% Ni, 0.2% Cr, 775ppm Co and 0.22% Zn from 2m down the hole (MZ801) and
    • 9m @ 1.08% Ni, 0.22% Cr, 690ppm Co and 0.63% Zn from 1m (MZ811)
  • Earlier RAB drilling by Great Australian Resources (GAR) in 2004 also reported a significant interval of:
    • 7m @ 1.46% Ni from 16m within a total of 29m @ 0.8% Ni, from 11m down the hole, (CNRC1)
  • Significantly, the bottom of hole assays for the GAR drillholes terminated in bedrock zones with high Nickel content including 15m @ 0.13% Ni from 82m down the hole (CNRC02) and 14m @ 0.06% Ni from 82m down the hole (CNRC01)
  • These additional results support the view that the ultramafic rocks along the Springfield side of the East Menzies project area are prospective for nickel sulphides.
  • The Company is undertaking further research towards developing a suitable exploration program to investigate the mineral bearing potential of the area

Discussion

The Springfield area was identified by the Company following a review of historical exploration and gold mining activities. The documented occurrences of sulphides north of Springfield at Cepline are prospective features for the occurrence of volcanogenic nickel and base metal deposits as well.

The Springfield area comprises three suites of volcano‐sedimentary rocks which includes.

  • I) Upper Mafic High Mg Basalts
  • II) Sedimentary‐ Pyritic Chert, slate, banded amphibolite, fuchsite, tuffaceous metasediments
  • III) Lower Ultra Mafic ‐ Meta komatiites (tremolite, actinolite, Talc, chlorite)

A literature search of open file Wamex records over the prospect area indicated that significant values of Nickel were reported by BHP Mineralsfrom the Cepline Prospect, during a gold exploration program in 1986, (Report ID A19328).

The peak results for the BHP drilling were reported for RAB drill hole JR011, one of 4 vertical holes completed by the Company in 1986 over the Cepline prospect in a single line across the Springfield Fault.

JR011 included 3m @1.53% Ni from 15m and 3m @ 2.27% Ni from 31m. Accessory minerals in JR011 included 22m @ 0.29% Zn from 14m, 8m @0.29% Pb from 5m, 2m @ 0.15% Co from 31m and 36m @ 0.4% Cr from surface. The high Chromium content was attributed to Fuchsite, which is believed to be derived from hydrothermal alteration of an underlying sequence of Komatiite lavas. Fuchsite has been locally quarried in the area for specimen samples.

Figure 1 Borehole Location Plan Showing Geology and Intervals of Sulphide Mineralisation

The Company is undertaking further research towards developing a suitable exploration program over this part of the project area. This research work has identified additional exploration results within the Cepline Prospect which are relevant to understanding the nature and prospectivity of the area, as follows:

In 2004, Great Australian Resources Ltd followed up the nickel sulphide target at the Cepline Prospect drilled by BHP. Two holes were completed (CNRC01, and CNRC02). This work returned a peak assay result of 7m @ 1.46% Ni from 11m down the hole including 1m @ 2.0% nickel from 16m down the hole (CNRC1).

During 2008, Proto Resources completed a 16‐hole Air Core program over Cepline, again with emphasis on the earlier BHP and GAR drilling results. Four of the Proto Holes intersected significant intervals of mineralisation with best down the hole results of:

  • MZ0801‐ 12m @ 1.22% Ni, 0.29% Cr, 775ppm Co and 0.22% Zn from 2m
  • MZ0811‐ 9m @ 1.08% Ni, 0.22% Cr, 690ppm Co and 0.63% Zn from 1m
  • MZ0812‐ 6m @ 0.90% Ni, 0.22% Cr, 466ppm Co and 0.69% Zn from 26m

The location of these drillholesisshown on Figure 1. Complete detailsincluding collar and assay results for these drilling results are presented in the accompanying table 1. The supporting JORC 2012 Table 1 check list is provided in appendix 1 of this release.

The exploration report completed by Proto (Wamex Report ID A082168) indicated that mineralisation occurs in saprolite developed over the Lower Ultra Mafic tremolite Schists (Suite III). The mineralisation remained open to the south but possible strike extensions in that direction could not be investigated by Proto due to tenement boundaries which restricted further exploration in that direction. A project‐scale VTEM program was proposed by the Company to test for potential bedrock and laterite conductors within the mafic‐ultramafic facies, however, this work was never carried out.

The results obtained by Proto were attributed to nearsurface enrichment of Nickel and/or preferential weathering along structural pathways. However, the results obtained by GAR, which drilled much deeper, encountered bedrock intervals which also have very high concentrations of Nickel which peak at 1m @ 0.26% Ni from 85m which occurs within a broader interval of 15m @ 0.13% Ni from 82m. This result suggests that the ultramafic rocks at depth are themselves enriched in Nickel and present a larger Nickel sulphide target for the Company to investigate.

Next Steps

The geochemical results obtained from recent drilling and historical exploration are indicators that the high Mg or Komatiitic basalts at Menzies have elevated concentrations of Nickel, which is accompanied by Cobalt, Chromium, Lead, and Zinc. There appears to be an intimate association of these elements and concentrations of them, within a sequence of interflow sediments which occur above and intermingle with the Komatiites below. This mineralisation has been brought to a surface near position by thrust faulting, along the Springfield‐Venn Fault Zone.

The mineralised intervals are potentially significant, and warrant follow up exploration. In this connection the company is undertaking an audit of all previous exploration activities, including ground truthing, and checking borehole locations, and geological observations at prospectscale. The Company has also resampled 193 RC intervals from the Springfield drilling program. These samples have been submitted for Multi Element analysis by ICP MS and Platinum Group analysis by Fire assay.

Competent Persons Statement and Consent

The information in this release that relates to Exploration Results is based on and fairly represents information compiled by Mr. Michael Johnstone Principal Consultant for Minerva Geological Services (MGS). Mr Johnstone is a member of the Australasian Institute of Mining and Metallurgy and has sufficient experience that is relevant to the reporting of Exploration Results to qualify as a Competent Persons as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr. Johnstone consents to the inclusion in this release of the matters based on their information in the form and context in which it appears.

Figure 2 East Menzies Gold Project tenement and Operations Plan

About Resources and Energy

Resources and Energy Group Limited (ASX: REZ) is an independent, ASX‐listed mineral resources explorer, and miner with projects located in premier mining jurisdictions in Western Australia and Queensland. In Western Australia, the company's flagship is the East Menzies Gold project (EMGP), situated 130km north of Kalgoorlie. The EMGP represents a +100km2 package of contiguous mining, exploration, and prospecting licenses, which are located within a significant orogenic lode gold province figures 2 and 3.

Figure 3 East Menzies Gold Project Regional Location Plan

For resource growth, the company's focus is presently exploring the eastern and southwestern sides of the project area (Gigante Grande and Springfield Prospects). On the western side of the project area studies to investigate opportunities for renewed mining operations in M29/189 Granny Venn, M29/141 Goodenough, and M29/427 Maranoa have commenced. Most recently the company completed grade control drilling within the Granny Venn open pit and has resumed mining operations at the Granny Venn Open Pit Gold Mine. As of End July 2021, the Company has combined gold and silver resources (JORC 2012) of 192k oz/au and 862k oz/au ag; refer to table 1.

Material Cut-off Indicated Inferred Indicated and Inferred
Deposit (gt/Au) Tonnes(kt) Au Ag Au$(g/t)$ $(g/t)$ $(koz)$ Ag.(koz) Tonnes(kt) Au Ag$(g/t)$ $(g/t)$ $(koz)$ Au Ag(koz) Tonnes (kt) Au Ag Au(g/t) (g/t) (koz) (koz) Ag.
Mount Oxide 0.35 500 1.09 8 18 136 700 0.96 4 21 87 1200 1.02 6 39 223
Mackenzie (1) Primary 0.55 1200 1.25 13 48 482 1030 1.28 5 42 157 2220 1.27 9 90 639
Goodenough (2) Primary 634 1.84 38 82 1.99 5.2 716 2.07 43
Granny Venn (3) Primary 134 2.03 9 41 2.14 2.9 175 2.1 12
Maranoa (4) Primary 46 8 8.05 46 5.7 8
Total 2468 113 618 1899 79 252 4357 192 862

Table 1 Gold and Silver Resource Summary

In Queensland, the company has a 12km2 Mineral Development Licence over the Mount Mackenzie Mineral Resource and retains a further 15km2 as an Exploration Permit. These Development and Exploration Licences are in the Connors‐Auburn Arc and are prospective for high, intermediate, and low sulphidation gold and base metals mineralisation. The current resource has been estimated at 3.42Mt @ 1.18g/t gold and 9g/t silver for a total of 129,000 oz gold and 862k oz silver. A metallurgical test program is currently underway to investigate processing optionsfor primary mineralisation below the current resource extents.

Further information:

Richard Poole Executive Director E: [email protected] P: +61 2 9227 8900

Approved for Release by the REZ Board

Appendix 1

Table 1 Collar details and Assay Intervals

TD Easting Northing From To Length Ni Co Cr Pb Zn
Hole Ref (m) Mga Z51 MgA Z51 Dip (m) (m) (m) (ppm) (ppm) (ppm) (ppm) (ppm)
0 1 1 3060 193 1730 30 660
1 2 1 25900 1495 4000 20 5050
2 3 1 11600 726 2140 10 1880
3 4 1 12300 876 3550 0 2240
4 5 1 14700 1135 3300 10 2450
5 6 1 20800 1370 3520 0 2710
MZ0801 13 315705 6711932 V 6 7 1 13300 894 3440 10 2350
7 8 1 10750 661 2850 50 2040
8 9 1 4440 230 2820 410 890
9 10 1 4790 246 2570 510 1000
10 11 1 16900 831 2880 50 3840
11 12 1 5350 443 1945 20 1130
12 13 1 5590 396 1285 10 1130
0 6 6 77 5 412 30 20
MZ0802 11 315724 6711990 V 6 11 5 155 9 606 50 30
MZ0803 6 315745 6712005 V 0 6 6 35 0 184 10 0
0 2 2 159 8 307 20 30
2 6 4 55 0 348 40 10
MZ080429 6 12 6 29 0 574 30 10
V 12 19 7 480 13 909 30 160
315764 6711958 19 21 2 4540 751 3600 10 1110
21 23 2 4490 394 3740 0 1080
23 25 2 3360 338 3480 0 800
25 27 2 1150 42 2180 0 180
27 29 2 2670 1915 2420 10 520
0 4 4 69 6 222 20 0
MZ0805 8 315805 6711965 V 4 8 4 73 0 198 30 0
V 0 3 3 138 9 431 50 10
MZ0806 6 315785 6711889 3 6 3 139 55 447 150 20
0 5 5 69 0 454 100 10
5 10 5 56 6 743 190 0
6711848 10 15 5 33 0 603 50 20
MZ0807 31 315792 V 15 20 5 26 0 180 10 10
20 25 5 11 0 139 0 0
25 31 6 63 0 289 0 40
0 6 6 47 0 126 150 30
6 12 6 9 5 80 50 110
12 18 6 18 0 150 100 10
MZ0808 35 315796 6711800 V 18 24 6 5 0 17 20 0
24 30 6 14 0 130 10 0
30 35 5 65 8 228 20 40
0 6 6 88 10 136 50 10
MZ0809 16 315768 6711854 V 6 12 6 11 0 126 170 50
12 16 4 90 7 315 50 10
0 6 6 28 7 167 160 0
6 12 6 25 0 197 190 10
MZ0810 32 315760 6711795 V 12 18 6 7 0 53 40 0
18 24 6 7 0 58 220 10

Hole Ref TD Easting Northing Dip From To Length Ni Co Cr Pb Zn
(m) Mga Z51 MgA Z51 (m) (m) (m) (ppm) (ppm) (ppm) (ppm) (ppm)
MZ0810 32 315760 6711795 V 24 30 6 62 0 164 40 40
30 32 2 35 25 526 10 20
0 6 6 282 38 1500 600 110
6 12 6 163 0 2030 2320 150
12 17 5 128 5 1160 1000 80
17 18 1 5830 124 4110 260 3890
18 19 1 16950 401 3210 220 11500
MZ0811 26 315713 6711849 V 19 20 1 25600 734 2280 200 15800
20 21 1 5320 461 1540 30 3190
21 22 1 9220 626 1345 20 4690
22 23 1 6060 292 1625 20 3180
23 24 1 11300 672 1905 40 5350
24 25 1 12000 2560 2090 60 5780
25 26 1 5200 340 1615 60 3120
0 6 6 189 14 621 210 80
6 12 6 495 22 1390 1820 350
12 14 2 806 14 2570 180 420
14 16 2 3390 80 3020 100 2270
16 18 2 2150 43 3860 160 1060
18 20 2 2260 34 3910 510 1230
20 22 2 1980 38 2580 260 1010
6711802 V 22 24 2 1310 29 1150 350 830
MZ0812 34 315711 24 26 2 6225330 23 309 190 650
26 27 1 9070 152 1650 160 4990
27 28 1 17150 216 3260 190 7440
28 29 1 10650 901 3330 5960 12900
2930 3031 11 4330 777184 13601750 1410240 71903070
31 32 1 7190 568 1720 1270
32 33 1 4790 190 2490
33 34 1 3140 168 1920 910 603057041002630
0 2 2 1200 63 1130 0 100
MZ0813 5 315661 6712002 V 2 5 3 81 8 408 40 10
0 2 2 830 50 954 10 120
2 4 2 1600 98 1750 0 220
MZ0814 8 315657 6711945 V 4 6 2 2760 148 2250 20 320
6 8 2 1230 70 1320 0 120
0 6 6 553 47 1330 0 40
6 8 2 1260 65 1790 0 60
MZ0815 12 315662 6711902 V 8 10 2 1010 64 1430 10 50
10 12 2 1250 58 1500 0 60
0 2 2 1880 238 1960 30 220
2 4 2 2000 144 1180 10 100
MZ0816 7 315660 6711857 V 4 6 2 1920 135 692 0 60
6 7 1 2000 104 618 10 70
0 4 4 204 18 445 307 22
10 11 1 600 ND ND ND ND
CNRC1 96 315735 6711825 V 11 12 1 1600 ND ND ND ND
12 13 1 800 ND ND ND ND
13 14 1 1800 ND ND ND ND

Hole Ref TD Easting Northing Dip From To Length Ni Co Cr Pb Zn
(m) Mga Z51 MgA Z51 (m) (m) (m) (ppm) (ppm) (ppm) (ppm) (ppm)
14 15 1 1000 ND ND ND ND
15 16 1 7000 ND ND ND ND
16 17 1 11800 ND ND ND ND
17 18 1 16200 ND ND ND ND
18 19 1 11200 ND ND ND ND
19 20 1 20900 ND ND ND ND
20 21 1 13200 ND ND ND ND
21 22 1 16800 ND ND ND ND
22 23 1 12300 ND ND ND ND
23 24 1 9400 ND ND ND ND
24 25 1 3700 ND ND ND ND
25 26 1 7900 ND ND ND ND
26 27 1 6700 ND ND ND ND
27 28 1 2400 ND ND ND ND
28 29 1 4700 ND ND ND ND
29 30 1 7900 ND ND ND ND
30 31 1 4400 ND ND ND ND
31 32 1 13300 ND ND ND ND
32 33 1 13500 ND ND ND ND
33 34 1 8300 ND ND ND ND
34 35 1 4000 ND ND ND ND
35 36 1 3100 ND ND ND ND
36 37 1 9100 ND ND ND ND
37 38 1 10900 ND ND ND ND
CNRC1 96 315735 6711825 V 38 39 1 7100 ND ND ND ND
39 40 1 3100 ND ND ND ND
40 44 4 371 ND ND ND ND
44 48 4 774 ND 41 ND ND ND ND
4 8 4 2000 ND ND ND ND
48 49 1 2100 ND ND ND ND
4950 5051 11 1900 ND NDND NDND NDND
51 52 1 1200 ND ND ND ND
52 56 4 360 ND ND ND ND
56 60 4 540 ND ND ND ND
60 64 4 248 ND ND ND ND
64 68 4 693 ND ND ND ND
68 72 4 399 ND ND ND ND
72 76 4 234 ND ND ND ND
76 80 4 216 ND ND ND ND
80 81 1 400 ND ND ND ND
81 82 1 600 ND ND ND ND
82 83 1 1000 ND ND ND ND
83 84 1 1100 ND ND ND ND
84 85 1 900 ND ND ND ND
85 86 1 1000 ND ND ND ND
86 87 1 1200 ND ND ND ND
87 88 1 1100 ND ND ND ND
88 92 4 338 ND ND ND ND
92 96 4 474 ND ND ND ND

Hole Ref TD Easting Northing Dip From To Length Ni Co Cr Pb Zn
(m) Mga Z51 MgA Z51 (m) (m) (m) (ppm) (ppm) (ppm) (ppm) (ppm)
0 4 4 75 ND ND ND ND
12 16 4 84 ND ND ND ND
16 20 4 31 ND ND ND ND
20 21 1 300 ND ND ND ND
21 22 1 400 ND ND ND ND
22 23 1 1100 ND ND ND ND
23 24 1 3300 ND ND ND ND
24 25 1 1800 ND ND ND ND
24 28 4 35 ND ND ND ND
28 32 4 54 ND ND ND ND
32 36 4 77 ND ND ND ND
36 40 4 78 ND ND ND ND
40 44 4 107 ND ND ND ND
44 48 4 543 ND ND ND ND
4 8 4 15 ND ND ND ND
48 52 4 768 ND ND ND ND
52 56 4 161 ND ND ND ND
56 60 4 232 ND ND ND ND
60 64 4 138 ND ND ND ND
64 68 4 320 ND ND ND ND
68 72 4 503 ND ND ND ND
72 73 1 200 ND ND ND ND
73 74 1 600 ND ND ND ND
74 75 1 900 ND1300 ND ND ND ND
CNRC2 90 315760 6711835 V 7576 7677 11 1400 ND NDND NDND NDND
77 78 1 1100 ND ND ND ND
78 79 1 1400 ND ND ND ND
79 80 1 1200 ND ND ND ND
80 81 1 900 ND ND ND ND
8 12 4 14 ND ND ND ND
81 82 1 800 ND ND ND ND
82 83 1 1200 ND ND ND ND
83 84 1 1100 ND ND ND ND
84 85 1 1900 ND ND ND ND
85 86 1 2600 ND ND ND ND
86 87 1 2000 ND ND ND ND
87 88 1 1100 ND ND ND ND
88 89 1 900 ND ND ND ND
89 90 1 900 ND ND ND ND

Appendix 2 JORC Code, 2012 Edition – Table 1

Section1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

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JORC

Code explanation Commentary

Criteria

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Criiater OCCodelanioJRtexpan Cotammenry
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ture fhelahbeheIioniptttwtreseendrlldheiingienionientattoranor‐fkeld sionineisetattruoymrac‐dedhaisiintutotroresconsreve‐dudlingbiashisholdtcea sampsu,bedddifteteassesseanreporma‐l.iar helecdhadlfodulbTienioninimizeiainingingiastetattettroseors mponrcsamp
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diAutsor re‐ievws helfdTitstsresuoanyauorre‐flhndiewingiqtevossampcues andata dhabedekeNoitstaauveenunrn.

Section 2 Reporting of Exploration Results

Criiater JOR delanCCoiotexpan Cotammenry
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