TIDMBGL
RNS Number : 9077P
Bullabulling Gold Limited
31 October 2012
Bullabulling Gold Limited
31 October 2012 ASX Code: BAB, AIM Code: BGL
QUARTERLY ACTIVITY REPORT
FOR THE THREE MONTHS ENDED 30 September 2012
Highlights
Bullabulling Gold Project - Prefeasibility Study (PFS)
-- PFS well advanced, key physicals and preliminary cost estimates developed
-- Capital expenditure estimated at $297 million to $333 million
-- Operating costs estimated at $27.50 per tonne
-- Average cash costs over initial 10 year mine life $1,100 per ounce
- Cash costs materially lower in early years of operation
- Opportunities for cash cost reduction identified
-- Immediate progression to Definitive Feasibility Study in early 2013 supported
Exploration and Resource Development
-- 26 infill RC drill holes completed at Bullabulling
-- Resource update completed, delivering increased tonnage and grade
- Total JORC Resources now exceed 3.5 million ounces of gold
-- New prospective ultramafic-amphibolite sequence intersected by diamond drilling
- Consistent with geological setting of the existing
Bullabulling Deposit
- Assays confirm highly anomalous gold within the sequence
Corporate
-- Tim Netscher appointed independent Non-Executive Director
-- Mark Braghieri appointed General Manager Development
-- Cash position at 30 September of $6.0 million
NOTE: All financials stated in AU$, unless otherwise
indicated.
Bullabulling Gold Project Prefeasibility Study
The Prefeasibility Study progressed well during the period with
key physical parameters and preliminary cost estimates developed in
preparation for the final round of pit optimisation for the
PFS.
Average operating costs over the forecast 10 year mine life were
estimated to be approximately $27.50 per tonne of ore mined and
processed, comprising $14.00 for mining, $12.00 for processing and
$1.50 for administration. These cost estimates are based on
contractor mining and so include the contractor's margin and full
ownership costs of the mining fleet. There has been no
capitalisation of pre-stripped waste, with all waste mining costs
included in the operating cost.
Operating costs will vary over the life of mine in line with
variations in the proportion of oxide, transitional and fresh ore
treated in a given period, the depth of mining and variations in
stripping ratio. Royalties are expected to amount to $1.50 to $2.00
per tonne depending on gold price.
Over the 10 year life of mine, average head grade of
approximately 0.88g/t is indicated, with plant recovery of
approximately 88% leading to average life of mine cash costs of
$1,100 per ounce of gold produced. In the early years of the
project cash costs are expected to be materially lower, as higher
than average grade ore will be preferentially targeted and mining
depth will be shallower.
Capital cost estimation is now also well advanced. Total capital
costs for the project are expected to be in the range of $297 to
$333 million. The processing facilities comprise the bulk of the
capital estimate at $213 to $225 million, with infrastructure
estimated at $84 to $108 million. These capital estimates include
allowances for engineering, indirect costs, owner's costs and
contingencies.
The final round of pit optimisation has commenced, the output of
which will form the basis of detailed open pit designs. Production
scheduling will follow, with focus on optimising the schedule to
bring forward high value ore to maximise early stage cash flow and
achieve rapid capital payback. This is the final phase of the PFS
which is expected to be completed around year-end, with compilation
and reporting anticipated in first quarter 2013.
No technical impediments to the development of the project have
been identified and based on results to date the PFS is expected to
support an immediate progression to Definitive Feasibility Study
(DFS) in early 2013. During the DFS a number of areas with
potential to reduce cash costs which were identified during the PFS
stage will be further evaluated, including:
-- Alternative options to secure lower-cost energy
-- Additional metallurgical test work to improve recovery and lower cash costs
-- Additional geotechnical drilling that may enable steeper pit
slopes to be employed, reducing waste mining requirements
-- Greater use of pit void backfilling to reduce waste haulage costs
-- The potential for owner mining to reduce overall mining costs
-- The potential to increase local employment levels to cut
travel and accommodation costs and reduce camp establishment
costs
Exploration and Resource Development
Bullabulling Infill Drilling Program
During the quarter a 26 hole, 3,837 metre infill drilling
program was carried out principally targeting two areas where
additional information was sought to finalise open pit designs for
the PFS. Full drill hole details and assay results for the program
were reported to the market on 23 August 2012.
Drilling from Bacchus East tested areas below the Bacchus Pit,
where hole spacing was previously too broad to confirm geological
continuity. Several holes reported significant intercepts
including; 24 metres at 1.14g/t gold in hole BJ4036; 5 metres at
1.21g/t gold in hole BJ4034; 11 metres at 1.10g/t gold in hole
BJ4047; and 3 metres at 3.18g/t gold in hole BJ4068. The results
demonstrated down-dip continuity of the footwall lodes in Bacchus
East below the Bacchus Pit and confirmed that significant widths of
higher grade mineralisation (+1g/t gold) remain open at depth.
Drilling also tested a largely undrilled section of the corridor
between the Hobbit and Dickson's Prospects, which is traversed by
the Great Eastern Highway. Results from the two drill fences
immediately adjacent to the road reserve indicated that
mineralisation is sporadically developed in close proximity to the
highway. Encouraging results were returned further to the north
with hole BJ4177 intersecting 8 metres at 6.59g/t gold and holes
BJ4198 and BJ4199 returning 10 metres at 0.88g/t and 8 metres at
1.53g/t respectively.
Bullabulling Mineral Resource Update
Following interpretation of results from the infill drilling
program, a revised Mineral Resource estimate for the Bullabulling
Gold Project was prepared. Indicated and Inferred Resources at the
Bullabulling deposit increased to 104.5 million tonnes grading
0.99g/t. Both tonnage and grade increased, leading to a 120,000
ounce increase in contained gold.
Total project resources now stand at 109.3 million tonnes
grading 1.00g/t for just over 3.5 million ounces, as detailed in
the table below.
Bullabulling Gold Project Resource Estimate (0.5g/t cut-off)
----------------------------------------------------------------------------
Deposit Class Tonnes (Mt) Grade (g/t) Ounces
----------------------- ----------- ------------ ------------ ----------
Bullabulling Laterite Inferred 1.7 0.89 48,000
----------------------- ----------- ------------ ------------ ----------
Bullabulling Primary Indicated 71.7 0.96 2,209,000
----------------------- ----------- ------------ ------------ ----------
Inferred 31.1 1.07 1,070,500
----------------------------------- ------------ ------------ ----------
Bullabulling Total 104.5 0.99 3,327,500
------------------------------------ ------------ ------------ ----------
Gibraltar Inferred 4.8 1.15 177,500
----------------------- ----------- ------------ ------------ ----------
Project Total 109.3 1.00 3,505,000
------------------------------------ ------------ ------------ ----------
The new Bullabulling resource estimate was prepared by Snowden
Mining Industry Consultants in accordance with the JORC Code (2004)
and ASX Companies Updates.
Stratigraphic Drilling Program
During the quarter two stratigraphic diamond holes were drilled
in order to validate the three dimensional (3D) geological model
that has been developed from geophysical data acquired from the
project area (see release 6 September 2012). Assay results were
received post quarter end and reported on 30 October 2012.
Hole BBDE001, drilled at a dip of 60 degrees towards the east,
traversed the western limb of the Bullabulling fold before
targeting a sub-horizontal seismic feature interpreted as a
disharmonic fold structure at 450 metres to 500 metres below
surface. The main zone of mineralisation in the western limb was
encountered as expected from 60 metres to 190 metres down-hole.
Results within this interval included 7.6 metres at 2.14g/t gold
from 60.4 metres, 4 metres at 2.64g/t gold from 117 metres and 3
metres at 1.17g/t gold from 164 metres.
Of greater significance, a zone of pyrite and pyrrhotite
mineralised felsic to mafic schist was identified from 455 metres
to 503 metres, passing into a 15 metres thick ultramafic unit
immediately above the contact with granite. This sequence is
consistent with the geological setting of the existing Bullabulling
deposit and importantly assays returned sporadic, but highly
anomalous gold values of up to 0.38g/t between 472 metres and 489
metres. The seismic feature is now considered to represent the
granite contact.
Hole BBDE002 was drilled at a dip of 60 degrees towards the west
and targeted the eastern fold limb. The hole was terminated earlier
than expected after penetrating a sub-horizontal felsic schist
sequence before encountering granite at 212 metres.
The mafic and ultramafic sequence intersected at depth in
BBDE001 may be the same sequence that hosts the Bullabulling
deposit which has been tightly folded, perhaps by the intruding
granite, explaining why BBDE002 did not intersect the interpreted
geology. Alternatively BBDE001 may have intersected a separate
footwall ultramafic unit that has not been intersected in prior
drilling (see Figure 2). Either way, identification of another
occurrence of the geological sequence that hosts the existing
Bullabulling deposit, with associated gold mineralisation, is
considered to be a significant discovery that warrants further
evaluation.
The 3D geological model will be updated using the detailed
geological and assay data from the diamond drill holes ahead of
planning the next phase of exploration.
Corporate
Board and Management Appointments
On 20 August 2012, Mr Tim Netscher was appointed a Non-Executive
Director of Bullabulling Gold, completing a restructure of the
Company's board.
Tim is currently Managing Director of Gindalbie Metals Limited
and a Non-Executive Director of Industrea Limited, both ASX 200
companies.
Tim is a Chemical Engineer and also holds a commerce degree and
MBA. He has extensive experience in operations and project
management in large scale mining projects and has held senior
positions with Impala Platinum, QNI Limited, PT Inco, Vale and
Newmont.
Since quarter end, Mr Mark Braghieri was appointed to the
newly-created position of General Manager Development. In this role
Mark will assist the Company in the completion of the Bullabulling
Gold Project Prefeasibility Study, before taking responsibility for
the successful execution of the Definitive Feasibility Study,
project construction and ultimately commissioning.
Mark has a degree in Mining Engineering and an MBA, with 30
years of industry experience predominantly in large-scale open-pit
mining.
Mark has held senior technical and operational management
positions for a number of well-regarded Australian and
international mining companies, during which time he was involved
in the Boddington Gold Mine feasibility study and the establishment
of the Kalgoorlie Super Pit, two of the largest gold mines in
Australia. He has also held senior management roles with major
Australian open pit mining contractors with multi-project
responsibility.
Mark will take up his position with Bullabulling Gold in late
November after serving out a notice period with his current
employer.
Cash Position
At the end of the quarter, the Company had cash and deposits
totalling $6.0 million.
For information, contact:
Brett Lambert
Bullabulling Gold Limited
Level 2, 55 Carrington
Street
Nedlands, WA, 6009, Australia
Tel: +61 8 9386 4086
------------------------------- -----------------------------------------------
Canaccord Genuity (Broker) Westhouse Securities Limited
John Prior (UK Nominated Adviser)
Tel: +44 20 7523 8350 Martin Davison
Tel: +44 20 7601 6100
------------------------------- -----------------------------------------------
Neil Boom John Gardner / Blake Wilshaw
Gresham PR Ltd (UK media) MAGNUS Investor Relations
Tel: +44 7866 805 108 (Australian Media)
Tel: +61 8 9212 0101
jgardner@magnus.net.au/bwilshaw@magnus.net.au
------------------------------- -----------------------------------------------
About Bullabulling Gold Limited
Bullabulling Gold Limited is listed on the Australian Securities
Exchange (ASX:BAB) and London's AIM Market (AIM:BGL) and has
approximately 289 million shares on issue. The Company's primary
asset is the wholly owned Bullabulling Gold Project, located near
Coolgardie in Western Australia.
The Bullabulling Gold Project hosts JORC compliant Mineral
Resources of 3.5 million ounces comprising Indicated Resources of
71.7 million tonnes at 0.96 g/t gold (2.2 million ounces) and
Inferred Resources of 32.8 million tonnes at 1.06 g/t gold (1.1
million ounces) at Bullabulling and Inferred Resources of 4.8
million tonnes at 1.15 g/t gold (0.2 million ounces) at Gibraltar.
Exploration has demonstrated strong potential for further expansion
of the resource base.
The Bullabulling deposit is amenable to bulk tonnage open pit
mining and conventional CIL processing has delivered high gold
recoveries. The deposit is situated on granted Mining Leases in
close proximity to infrastructure.
The Company is currently undertaking a pre-feasibility study
into the development of a large scale, low cost mining operation at
Bullabulling, with first production targeted for 2015.
Competent Person Statement
The information in this report that relates to the Exploration
Results, Mineral Resources or Ore Reserves is based upon
information compiled by Mr Trevor Pilcher, who is a full time
employee of the company and is a member of The Australasian
Institute of Mining and Metallurgy. Mr Pilcher has sufficient
experience relevant to the style of mineralisation and type of
deposit under consideration and the activity in which he is
undertaking to qualify as a Competent Person under 2004 Edition of
the Australasian Code for Reporting Exploration Results, Mineral
Resources and Ore Reserves (JORC Code). Mr Pilcher consents to the
inclusion in this report of the matters based on his information in
the form and context in which it appears.
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98,
30/9/01, 01/06/10, 17/12/10
Name of entity
BULLABULLING GOLD LIMITED
-------------------------
ABN Quarter ended ("current
quarter")
50 153 234 532 30 SEPTEMBER 2012
-------------- -----------------------
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to date
activities
$A'000 (9 months)
$A'000
---------------- -------------
Receipts from product sales
1.1 and related debtors 34 34
Payments for (a) exploration
and (2,625) (5,291)
evaluation
(b) development - -
(c) production - -
1.2 (d) administration (346) (3,657)
1.3 Dividends received - -
Interest and other items of
1.4 a similar nature received 182 372
1.5 Interest and other costs of - -
finance paid
1.6 Income taxes received / (paid) 619 619
Other - cash balance in Auzex
Resources Limited on acquisition
1.7 date - 6,634
Net Operating Cash Flows (2,136) (1,289)
----- ---------------------------------- ---------------- -------------
Cash flows related to investing
activities
Payment for purchases of:
(a) prospects
(b) equity - -
investments - (4,886)
(c) other fixed
1.8 assets (27) (38)
1.9 Proceeds from sale of: (a) - -
prospects - -
(b) equity
investments - -
(c) other fixed
assets
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if - -
material)
Net investing cash flows (27) (4,924)
---------------- -------------
Total operating and investing
cash flows
1.13 (carried forward) (2,163) (6,213)
----- ---------------------------------- ---------------- -------------
Total operating and investing
cash flows
1.13 (brought forward) (2,163) (6,213)
----- ----------------------------------
Cash flows related to financing
activities
Proceeds from issues of shares,
1.14 options, etc. - 853
1.15 Proceeds from sale of forfeited - -
shares
1.16 Proceeds from borrowings - -
1.17 Repayment of borrowings - -
1.18 Dividends paid - -
1.19 Other - capital raising costs (18) (18)
--------- ---------
Net financing cash flows - 835
----- ---------------------------------- ---------
Net increase (decrease) in
cash held (2,181) (5,378)
Cash at beginning of quarter/year
1.20 to date 7,804 11,475
Exchange rate adjustments
1.21 to item 1.20 373 (101)
--------- ---------
1.22 Cash at end of quarter 5,996 5,996
----- ---------------------------------- --------- ---------
Payments to directors of the entity and associates of the
directors
Payments to related entities of the entity and associates of the
related entities
Current quarter
$A'000
----------------
Aggregate amount of payments to the parties
1.23 included in item 1.2 191
----------------
1.24 Aggregate amount of loans to the parties -
included in item 1.10
-------- -------------------------------------------------- ----------------
1.25 Explanation necessary for an understanding of the transactions
1.23 - Includes salaries paid to directors, as well
as superannuation paid on behalf of directors.
-----------------------------------------------------------------------------
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which
have had a material effect on consolidated assets and
liabilities but did not involve cash flows
None
-------------------------------------------------------
2.2 Details of outlays made by other entities to establish
or increase their share in projects in which the reporting
entity has an interest
None
------------------------------------------------------------
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available Amount used
$A'000 $A'000
3.1 Loan facilities - -
----------------- ------------
3.2 Credit standby arrangements - -
---- ---------------------------- ----------------- ------------
Estimated cash outflows for next quarter
$A'000
-------
4.1 Exploration and evaluation 493
-------
4.2 Development 725
-------
4.3 Production -
-------
4.4 Administration 746
---- --------------------------- -------
Total 1,964
---- --------------------------- -------
Reconciliation of cash
Reconciliation of cash at the Current quarter Previous quarter
end of the quarter (as shown $A'000 $A'000
in the consolidated statement
of cash flows) to the related
items in the accounts is as follows.
---------------------------------------- ---------------- -----------------
5.1 Cash on hand and at bank 1,996 3,804
---------------- -----------------
5.2 Deposits at call 4,000 4,000
---------------- -----------------
5.3 Bank overdraft - -
---------------- -----------------
5.4 Other (provide details) - -
---------------- -----------------
Total: cash at end of quarter
(item 1.22) 5,996 7,804
----- --------------------------------- ---------------- -----------------
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest
reference (note (2)) at beginning at end
of quarter of quarter
----------- ------------------- -------------- ------------
6.1 Interests in
mining tenements
relinquished, N/A
reduced or
lapsed
----------- ------------------- -------------- ------------
6.2 Interests in
mining tenements N/A
acquired or
increased
----------- ------------------- -------------- ------------
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or
conversion rights together with prices and dates.
Total number Number quoted Issue price Amount paid
per security up per security
(see note (see note 3)
3) (cents) (cents)
--------------------------- ------------- -------------- -------------- -----------------
7.1 Preference
+securities
(description)
------------- -------------- -------------- -----------------
7.2 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs,
redemptions
----- -------------------- ------------- -------------- -------------- -----------------
+Ordinary
securities
7.3 ** 289,033,871 289,033,871
------------- -------------- -------------- -----------------
7.4 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through returns
of capital,
buy-backs
7.5 +Convertible
debt securities
(description)
------------- -------------- -------------- -----------------
7.6 Changes during
quarter
(a) Increases
through issues
(b) Decreases
through securities
matured, converted
Exercise
7.7 Options 8,695,000 8,695,000 price Expiry date
(description
and conversion
factor) 1,776,162 1,776,162 Various Various
21 October
387,519 387,519 11c 2013
28 October
22c 2014
------------- -------------- -------------- -----------------
7.8 Issued during
quarter
------------- -------------- -------------- -----------------
7.9 Exercised
during quarter
------------- -------------- -------------- -----------------
7.10 Expired during
quarter
------------- --------------
7.11 Debentures
(totals only)
------------- --------------
7.12 Unsecured
notes (totals
only)
----- -------------------- ------------- --------------
Compliance statement
1 This statement has been prepared under accounting policies
which comply with accounting standards as defined in the
Corporations Act or other standards acceptable to ASX (see note
5).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 31 October 2012
Company Secretary
Print name: David M McArthur
Notes
1 The quarterly report provides a basis for informing the market
how the entity's activities have been financed for the past quarter
and the effect on its cash position. An entity wanting to disclose
additional information is encouraged to do so, in a note or notes
attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options
in respect of interests in mining tenements acquired, exercised or
lapsed during the reporting period. If the entity is involved in a
joint venture agreement and there are conditions precedent which
will change its percentage interest in a mining tenement, it should
disclose the change of percentage interest and conditions precedent
in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid
up is not required in items 7.1 and 7.3 for fully paid
securities.
4 The definitions in, and provisions of, AASB 6: Exploration for
and Evaluation of Mineral Resources andAASB 107: Statement of Cash
Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of
International Financial Reporting Standards for foreign entities.
If the standards used do not address a topic, the Australian
standard on that topic (if any) must be complied with.
== == == == ==
This information is provided by RNS
The company news service from the London Stock Exchange
END
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