Resources & Energy Group Limited provided an update on operations at the Granny Venn Gold Mine and the Springfield Nickel and precious metals prospect. The company recently completed a diamond tail over SF13 from 76m to 151.4m, refer figure 1. SF13 was originally drilled as an RC hole which was terminated short at 76m due to equipment failure. The diamond tail was justified on the basis of some favourable Nickel results and associated geochemistry from the RC portion of SF13(1) which inlcuded: 4m@ 0.3% Ni, 434ppm Co, 259ppm Cu, 65ppb (Pt+Pd) and 0.92% S from 65m down the hole.

The cored section in SF13 intersected a highly altered interval of ultramafic rocks (fuchsitequartz schist) from 118m to bottom of hole at 151.4m. Disseminated and blebby sulphides were noted throughout this interval, refer plates 1 and 2. The occurance of sulphides at depth, below previously identified nickel mineralisation is a significant outcome for this drill hole. Core samples from SF13 have been collected and sent for petrological assessment.

The drill core will be split, and samples submitted for geochemical assays, including Au, Pt and Pd. To assist with exploration planning at Springfield, the company has also obtained results from an earlier MLEM survey which was completed over a part of the prospect in 2004. A review of the 2004 MLEM data shows that the ground EM information is superior to more recent (2013) HELITEM data, however, the results are also impacted by Induced Polarisation (IP) effects.

The presence of (IP) effects, due to conductive overburden, significantly hinders interpretation of the AEM data. Work on reprocessing the existing EM datato remove IP /noise effects has commenced and quotations have been sought to carry out new MLEM survey over the project area to assist with target generation The third toll treatment (T3) for the Granny Venn Cutback has been out turned at the Perth Mint. A total of 2822 oz of gold and 175 oz of silver were produced from T3.

Final reconciliation of gold and silver production from the third campaign is pending completion of gold in circuit adjustments to production. Over the past few weeks, the haulage of ore from the project site to Golden Mile Millings Lakewood plant has stepped up, refer Plate 3. In this connection, between 30 and 35kt of ROM stocks, including oversize and LG flushing ore are being prepared for the 4th toll campaign. This is tentatively scheduled to commence at Lakewood on 13th May.

With mining operations nearing completion, the Companies mining partner BM Mining Services will complete dump profiling, deep ripping and topsoil spreading of waste emplacements and commence demobilising. Whilst these activities are underway the Company is stepping up exploration across the broader East Menzies Project area. This includes drilling investigations within the Granny Venn, Maranoa, and Springfield Prospects.

This work has already commenced. Planning work for a scout program at Cock Robin (E29/979) is underway. At Springfield work on reprocessing existing EM data has also commenced.

Quotations for a Moving Loop EM survey at Springfield have been floated and are being reviewed by the Company. At Gigante Grande cultural heritage clearance surveys have been completed. This work will unlock 2000ha of prospective ground, enabling the Company to advance exploration activity to test mineralisation north and south of exiting extents.

All of these activities will be funded by revenue generated from the Granny Venn Cutback.