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Resources & Energy Group acquiring East Menzies Gold Project, placement to raise $5 million

The acquisition will allow REZ to expand its existing asset base and accelerate its goal of becoming a significant gold producer.
Radio Gold Mine
REZ is currently operating the Radio Gold Mine in Western Australia

Resources & Energy Group Ltd (ASX:REZ) has entered into agreements to acquire the East Menzies Gold Project in central Western Australia for a total consideration of $2.1 million.

The Menzies Gold project is in a highly prospective region and comprises 27 tenements and 19 applications covering an area of over 103 square kilometres.

Notably, the acquisition brings together over 20 kilometres of contiguous strike of mineralised greenstone belt in the East Menzies gold field (EMGF).

REZ’s new leases encompass multiple project areas with existing exploration targets supported by high-grade drill results. These target areas are largely untested below depths of 100 metres.

The acquisition is subject to shareholder approval at a meeting to be held in December 2018.

$5 million placement

REZ is raising up to $5 million by way of a share placement at 5 cents per share to professional and sophisticated investors.

A further placement of up to $4 million will be completed, subject to or following shareholder approval to be sought at a shareholder’s meeting to he held on November 28, 2018.

Furthermore, REZ’s major debt holders have agreed to convert between $4.5 million and $5.5 million of debt to equity at the placement price.

READ: Resources and Energy Group achieves key milestone at Radio Gold Mine

REZ chairman Gavin Rezos said: “The acquisition of East Menzies will allow REZ to expand its existing asset base and accelerate the company’s goal of becoming a significant gold producer.

“REZ remains committed to developing a pipeline of projects across its asset base at Mt Mackenzie, Radio Gold and (if approved by shareholders) East Menzies whilst continuing to assess opportunities that add to this portfolio.

“REZ would like to thank its major shareholders who are also debt holders for showing tremendous confidence in the company by agreeing to convert their debt to equity”

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