Buying Toll Mill for $50M will reduce AISC (TSXv: RNX)

Q1/19 Highlights

Quarterly gold production: Gold mined production for the first quarter totalled 3,716oz compared to 13,780oz in the first quarter of 2018. Production was lower due to the planned temporary ramp down of bulk mining during the first phase of the ongoing 40,000 meter drilling program. The Gold mined grade in the first quarter was 3.36 g/t, 32% higher than in the first quarter of 2018.

Restart of Gold and Nickel production: Limited restart of bulk Gold mining is well underway at Beta Hunt. By the end of April 2019, the restart had already achieved a 40,000oz annualized run rate. Nickel production has also resumed and will contribute cash flow going forward.

Father's Day Vein: Development is now sufficiently advanced to allow mining activities to begin underneath the Father's Day Vein Discovery on 16 Level. This development will target a 1,406 g/t intersection sitting just 7 metres below the Father's Day Vein area.

Exceptional exploration results: Results from the 40,000 metre drill program that was initiated in the fourth quarter of 2018 have been positive. RNC is on track to complete a resource update by the end of the second quarter of 2019 and will shift its drilling focus from resource definition to a broader exploration campaign to test the substantial exploration potential of each of the four shears on the property. Highlights from assays received to-date include (all drill intervals quoted are true thicknesses):

1,017 g/t over 2.00 m, including 7,621 g/t over 0.27 m in hole WFN-029395.9 g/t over 4.75 m, including 2,210 g/t over 0.85 m in hole WFN-063468 g/t over 0.21 m in hole AZ13-156119 g/t over 6.40 m, including 1,406 g/t over 0.50 m in hole AZ15-01316.8 g/t over 27.8 m, including 748 g/t over 0.53 m in hole WFN-071Financing: Subsequent to the end of the first quarter, RNC closed a $12.0 million bought deal financing to assist in funding exploration activities, the proposed acquisition of the Higginsville Gold Operations from Westgold Resources Limited and general corporate purposes. Cash and cash equivalents including specimens at March 31, 2019 was $2.1 million.

Higginsville Acquisition – On May 13, RNC announced that it had exercised the previously-announced purchase option to acquire Higginsville from Westgold. On closing, RNC will pay Westgold A$25 million in cash and A$21 million in RNC shares (satisfied by the issuance of 49.8 million RNC shares), for total consideration of A$50 million (including the A$4 million deposit previously satisfied in RNC shares). RNC expects to finance the cash component of the purchase price with cash on hand and additional non-dilutive capital. The acquisition is expected to close on or about June 10, 2019.

Company page: https://www.rncminerals.com

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