Chart Analysis
RR1 Daily Timeframe Chart as of 18 May 2026
Reach Resources (ASX: RR1) — Signs Binding Option for 50/50 Profit Share Right-to-Mine Agreement at 80,000oz Murchison South Gold Project With Andel Resources
On 18 May 2026, Reach Resources Limited (ASX: RR1) announced it has entered into a binding option agreement with Andel Resources Pty Ltd, granting Andel an exclusive 180-day option to enter into a Right to Mine and Milling (RTMM) Agreement for the Murchison South Gold Project (M59/769 — Blue Heaven) in Western Australia. Under the proposed RTMM Agreement, Andel will fully fund all pre-mining activities, mining, haulage, and processing costs upfront, with repayment from gold revenue and a 50/50 share of net project profits on an at-cost, open-book basis. Ore will be processed at the Kirkalocka Mill, operated by Andel subsidiary Gylden Resources Pty Ltd, located approximately 75 km from the project. In consideration, Andel will pay Reach a non-refundable A$2 million option fee (within 21 days) and subscribe for 100 million shares (~9.4% of Reach's issued capital) at $0.009 per share, raising A$900,000. The RTMM Agreement covers M59/769 (Blue Heaven) only, with Reach retaining flexibility over its other tenements (M59/786 and M59/790).
Key Details at a Glance
| Detail | Value |
|---|---|
| Agreement Type | Binding option agreement for exclusive RTMM Agreement |
| Counterparty | Andel Resources Pty Ltd |
| Project | Murchison South Gold Project (M59/769 — Blue Heaven), WA |
| Mineral Resource (Blue Heaven) | 844kt @ 3.0 g/t Au for 80,000 oz (Indicated 530kt @ 2.6 g/t for 45,000 oz + Inferred 314kt @ 3.5 g/t for 35,000 oz) |
| Profit Share | 50/50 net project profits (at cost, open-book basis) |
| Funding | Andel fully funds mining, haulage, processing — repaid from gold revenue |
| Processing | Kirkalocka Mill (~75 km from project), operated by Gylden Resources (Andel subsidiary) |
| Mining Services | SMS (WA) Holdings Pty Ltd (Andel group) |
| Non-Refundable Option Fee | A$2,000,000 (payable within 21 days) |
| Strategic Placement | 100,000,000 shares at $0.009 (~A$900,000, ~9.4% of issued capital) |
| Option Period | 180 days from execution |
| RTMM Term | 4 years and 9 months (subject to extension) |
| Tenements Covered | M59/769 only; M59/786 and M59/790 retained by Reach |
How the RTMM Agreement Works — Andel Funds, 50/50 Profit Share
Under the proposed structure, Andel takes on the role of operator and funder:
Andel will fund, procure, and manage all mining, processing, and transport activities at its own cost, with those costs recovered from gold revenue before profits are shared. Mining and milling costs are charged on a direct cost recovery basis with no corporate overhead or related-party mark-up, subject to open-book disclosure, Reach audit rights, and annual independent benchmarking. Mining activities will be conducted under mine plans prepared by Andel. Mining services will be provided by SMS (WA) Holdings Pty Ltd, an Andel group company. Ore will be processed at the Kirkalocka Mill under a separate Toll Milling Agreement with Gylden Resources Pty Ltd, another Andel subsidiary.
Reach retains project oversight rights, including the right to nominate a site representative present for up to 5 days in any 7-day period, with monthly progress meetings between senior representatives of both parties. All tenement holding costs (100%) are recoverable under the RTMM in priority to Andel's cost recovery.
Reach will grant Andel a security interest over the tenements and the project bank account as part of the agreement.
Conditions Precedent and Option Exercise
The RTMM Agreement has been signed by Reach but becomes effective only upon Andel exercising the option. Exercise is subject to conditions precedent including FIRB approval, completion of legal and technical due diligence by Andel, execution of the Toll Milling Agreement and Mining Services Agreement, completion of a baseline environmental audit, and execution of the security agreement.
If conditions are not satisfied and the option is not exercised within the 180-day period, the option lapses and the RTMM does not take effect. The A$2 million option fee is non-refundable regardless of whether Andel exercises the option.
Blue Heaven Mineral Resource
The Blue Heaven deposit (M59/769) has a JORC 2012 Mineral Resource Estimate of 844kt at 3.0 g/t gold for approximately 80,000 ounces, reported on 9 April 2026:
| Classification | Tonnes (kt) | Grade (g/t Au) | Ounces |
|---|---|---|---|
| Indicated (Oxide) | 76 | 1.3 | 3,100 |
| Indicated (Primary) | 454 | 2.9 | 41,900 |
| Indicated Total | 530 | 2.6 | 45,000 |
| Inferred (Oxide) | 31 | 0.8 | 800 |
| Inferred (Primary) | 283 | 3.8 | 34,200 |
| Inferred Total | 314 | 3.5 | 35,000 |
| Total | 844 | 3.0 | 80,000 |
The open pit resource is constrained within an A$4,500/oz optimised pit shell above a 0.5 g/t Au cut-off. The resource was prepared by Andrew Goode (Mining Plus).
Use of Proceeds
The A$2 million option fee will fund mining approvals and accelerate project development and execution. The A$900,000 placement proceeds will fund general working capital, existing projects, and project identification.
Market Context
RR1 closed at $0.013 on the announcement day, up +30.0% from a previous close of $0.010, with an intraday high of $0.016. The 52-week range spans $0.007 to $0.018. At sub-2-cent levels, the absolute price movement was $0.003. The move occurred amid elevated gold prices and investor interest in near-production gold stories on the ASX.
Risks & Considerations
Option, not executed RTMM: The RTMM Agreement has been signed by Reach but is not yet effective. It becomes effective only upon Andel exercising the option within 180 days and satisfying all conditions precedent (including FIRB approval, due diligence, toll milling and mining services agreements, environmental audit, and security agreement). If conditions are not met, the option lapses.
50/50 profit share reduces Reach's net interest: Under the RTMM, Reach receives 50% of net profits after Andel recovers all costs from gold revenue. This significantly reduces Reach's economic interest compared to a self-funded mining operation. The net margin per ounce to Reach will depend entirely on Andel's cost base, which is subject to open-book audit but is managed by Andel.
Andel controls operations: Andel funds and manages all mining, processing, and transport activities under mine plans prepared by Andel. Reach's oversight is limited to a site representative (up to 5 days per 7-day period) and monthly meetings. Reach has limited control over operational decisions, mine sequencing, and cost management.
Security over tenements: Reach will grant Andel a security interest over the tenements and the project bank account. If the arrangement is terminated or disputes arise, the security could complicate Reach's ability to freely deal with the tenements.
Inferred Resource component: Approximately 44% of the total resource (35,000 oz of 80,000 oz) is classified as Inferred. Inferred Resources carry a lower level of geological confidence and may not convert to mineable material.
Single-tenement agreement: The RTMM covers M59/769 (Blue Heaven) only. The other Murchison South tenements (M59/786, M59/790) are not included, and it is unclear whether they contain additional resources or are required for infrastructure or mine planning purposes.
Placement at discount: The 100 million share placement at $0.009 is at a 10% discount to the pre-announcement close of $0.010 and increases shares on issue by approximately 9.4%.
Sub-2-cent stock: RR1 trades at sub-2-cent levels with limited liquidity. A $0.003 move equals a 30% change.
Key Dates & Timeline
| Date | Event |
|---|---|
| 9 April 2026 | Blue Heaven Mineral Resource Estimate — 844kt @ 3.0 g/t Au for 80,000 oz |
| 18 May 2026 | Binding option agreement with Andel announced; share price moved +30.0% |
| Within 21 days | A$2 million option fee and A$900,000 placement funds payable by Andel |
| 180-day option period | Andel to complete due diligence and satisfy conditions precedent |
| TBC | FIRB approval |
| TBC | Execution of Toll Milling Agreement and Mining Services Agreement |
| TBC | Option exercise by Andel and RTMM commencement |
| RTMM Term | 4 years and 9 months from commencement (subject to extension) |
Price Data
- Previous Close: $0.010
- Close Price (18 May 2026): $0.013
- Change (18 May 2026): +30.0%
- 52-Week Range: $0.007 – $0.018
Notable Price Levels
- $0.016 — intraday high on announcement day
- $0.015 — prior trading level
- $0.014 — earlier trading range
- $0.013 — announcement-day close
- $0.012 — intermediate level
- $0.011 — lower range of recent activity
- $0.010 — pre-announcement close
- $0.009 — Andel placement price
Key Takeaways
- RR1 moved +30.0% on 18 May 2026 following a price-sensitive ASX disclosure (absolute move of $0.003 at sub-2-cent levels), with an intraday high of $0.016.
- The announcement — Murchison South Fully Funded to Production — was the primary catalyst for the price movement.
- Reach has granted Andel Resources a 180-day exclusive option to enter into a Right to Mine and Milling Agreement for the Blue Heaven deposit (80,000 oz @ 3.0 g/t Au), under which Andel will fully fund mining, haulage, and processing with a 50/50 net profit share on an at-cost, open-book basis.
- Ore will be processed at Andel's Kirkalocka Mill (~75 km from the project), with mining services provided by Andel subsidiary SMS (WA) Holdings.
- Andel will pay a non-refundable A$2 million option fee and subscribe for ~9.4% of Reach's shares at $0.009 (~A$900,000). The RTMM is not yet effective — it requires Andel to exercise the option after satisfying conditions including FIRB approval and due diligence.
- The agreement covers M59/769 (Blue Heaven) only. Reach retains its other Murchison South tenements and grants Andel a security interest over the Blue Heaven tenements and project bank account.
Summary
Reach Resources announced a binding option agreement granting Andel Resources an exclusive 180-day option to enter into a Right to Mine and Milling Agreement for the Murchison South Gold Project's Blue Heaven deposit (80,000 oz at 3.0 g/t Au) in Western Australia. Under the proposed structure, Andel will fully fund all mining, haulage, and processing at cost, with ore processed at Andel's Kirkalocka Mill (~75 km away) and a 50/50 share of net project profits on an open-book basis. The announcement coincided with a +30.0% move to $0.013. Andel will pay a non-refundable A$2 million option fee and subscribe for ~9.4% of Reach's shares at $0.009 (~A$900,000). The RTMM is not yet effective — it requires Andel to exercise the option within 180 days after satisfying conditions precedent including FIRB approval, due diligence, and execution of toll milling and mining services agreements. The agreement covers M59/769 only, with Reach retaining flexibility over its other Murchison South tenements.
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