Bullabulling Gold Limited
ASX Announcement - 21 January 2013 AIM Code: BGL, ASX Code: BAB
QUARTERLY ACTIVITY REPORT
FOR THE THREE MONTHS ENDED 31 DECEMBER 2012
Highlights
Bullabulling Gold Project - Prefeasibility Study (PFS)
* Preliminary Mining Schedule produced
* Base case production of 1.95 million ounces over 10 years
* 650,000 ounces produced in first three years at a cash cost of $884 per
ounce
* Capital payback achieved in third year of operations
* PFS results strongly support progression to full feasibility study
* Significant opportunities for further project optimisation identified
Additional Mining Lease Acquired
* Rationalisation of tenement ownership improves access and opens up new
potential growth opportunities
* Removes a potential restriction to optimal open pit development
* Provides greater access to down dip extensions of the Bullabulling deposit
* Ensures the Company can fully exploit the southern extension of the
Bullabulling trend including higher grade mineralisation at the Edwards
prospect
* Provides greater flexibility for the placement of waste dumps and
infrastructure
Exploration and Resource Development
* Programs being developed to test for extensions to high grade
mineralisation adjacent to planned pits in the south
* Drilling to commence in the current quarter
* 3D geological model being updated to aid on-going regional exploration
Corporate
* General Manager Development commenced, additional staff appointments
expected in the current quarter
* 13.5 million Ordinary Shares issued to Resolute Mining for tenement
acquisition
* Cash position at 31 December 2012 $4.1 million
NOTE: All financials stated in AU$, unless otherwise
indicated.
BullabullingGold ProjectPrefeasibility Study
Preliminary Production Schedule
During the quarter a preliminary production schedule and cash
cost estimate were prepared for the Bullabulling Gold Project as
part of the prefeasibility study (PFS). Results strongly support
the financial viability of the project and progression to full
feasibility study.
The production schedule indicates that 1.95 million ounces of
gold would be recovered from an initial mine life of just over 10
years. The initial estimate of average life of mine cash costs was
$1,104 per ounce. However in line
with previous guidance, cash costs in early years will be
materially lower with 650,000 ounces produced in the first three
years at an estimated cost of $884
per ounce (see Figure 1).
Pre-production capital costs are expected to be in the range of
$297 million to $333 million. At the
current gold price and exchange rate of US$1,686/oz and US$1.054/A$ respectively, pre-production capital
expenditure would be recovered within the third year of
operations*.
Prefeasibility Study Mine Plan
The PFS mine plan incorporates five open pits along an eight
kilometre stretch of the Bullabulling trend. The pit designs were
based on a Whittle Pit Optimisation carried out at a gold price of
$1,500/oz. Contractor mining was
assumed.
The Dicksons and Bone Crusher pits in the north are separated
from the main Phoenix pit by Great
Eastern Highway and power transition lines respectively, as shown
in Figure 2. Mining has been excluded from corridors 100 metres
either side of the highway and 200 metres either side of the power
transmission lines. The full feasibility study will evaluate the
relocation of this infrastructure to extract resources within the
exclusion zones and potentially extend mine life.
The Edwards and Gryphon pits have been designed to extract small
but high grade pods of mineralisation that have been defined by
limited exploration of the southern portion of the Bullabulling
trend.
The mining inventory within the pit designs includes both Indicated and
Inferred resources representing 83% and 17% of contained ounces respectively,
as detailed in the table below. Additional drilling will be required to upgrade
the classification of the Inferred resource to enable its conversion to
Reserves.
Mining Inventory
Resource Classification Tonnage Grade Contained Gold
Inferred 11.5 Mt 1.02 g/t 378,000 oz
Indicated 67.6 Mt 0.84 g/t 1,836,000 oz
Indicated + Inferred 79.1 Mt 0.87 g/t 2,214,000 oz
*Note that the actual capital recovery period may vary from this
example based on the gold price and exchange rate received by the
Company at the time the mine is operational.
The waste to ore ratio is 3.6:1.
The preliminary schedule does not include any production from
the Gibraltar deposit, which hosts
an inferred resource of 4.8 million tonnes at 1.15g/t for 177,500
ounces of contained gold. A scoping study into the mining of
Gibraltar is nearing completion,
following which the integration of Gibraltar into the Bullabulling production
schedule will be evaluated.
Prefeasibility Study Program
Key PFS activities to complete are:
* Review and finalisation of the mining schedule
* Risk assessment
* Financial modelling
* Project development schedule
* Finalisation of the scope for the feasibility study
The review of mine scheduling will attempt to bring forward
higher grade ore, mined late in the project in the preliminary
schedule, to address the dip in gold production during years six
and seven highlighted in Figure 1.
The final PFS production schedule, financial assessment and the
first full draft of the PFS report are expected to be completed by
the end of January 2013.
Feasibility Study
Work on the full feasibility study will commence from the
beginning of February 2013. In
addition to refining and confirming work carried out during the
PFS, the feasibility study will evaluate a number of opportunities
that have been identified with potential to improve project
economics, including:
* Resource
*
+ Drilling from newly acquired M15/552 to evaluate down dip continuation
of higher grade mineralisation at the southern end of the Phoenix Pit
+ Testing for strike and depth extensions to high grade mineralisation in
the Edwards and Gryphon pits
* Mining
*
+ Optimisation of waste rock dumping strategy to reduce haulage costs
+ Further geotechnical studies to refine pit slope angles potentially
reducing waste mining
+ Evaluation of owner mining as a means of reducing operating costs
+ Relocation of infrastructure to extend mining between the Phoenix,
Dicksons and Bone Crusher pits
+ Inclusion of Gibraltar into the production schedule
+ General refinement of mine design and schedule through greater
attention to detail delivered from in-house engineering
* Processing
* Additional metallurgical test work aimed at improving gold recoveries
* Review tailings storage facility design aimed at reducing construction and
sustaining capital costs
* General
* Further evaluation of alternative power supply options for lower energy
costs
* Increased local employment to reduce travel and accommodation costs
Acquisition of Additional Mining Lease
In December 2012 the Company
completed the acquisition of mining lease M15/552 from Resolute
Mining Limited in exchange for 13.5 million ordinary Bullabulling
Gold shares.
M15/552, shown in red in Figure 3 below, is situated immediately
west of the Bullabulling gold deposit and is surrounded on three
sides by Bullabulling Gold's existing tenements.
Control of M15/552 ensures that the main Phoenix pit can be mined to optimal depth and
enables the Company to fully evaluate depth extensions to the
Bullabulling gold deposit, which dips west towards M15/552 and
remains open down dip. Drilling to date has already intersected
mineralisation beyond the limit of the current resource. In
addition, the Company's future exploration of the southern portion
of the Bullabulling trend will no longer be constrained by the
tenement boundary.
Bullabulling Gold now has greater flexibility in the positioning
of waste rock dumps, haulage roads and other infrastructure which
may lead to improved project economics, particularly where haulage
distances can be reduced.
Explorationand Resource Development
Bullabulling Resource Drilling
In addition to removing restrictions on the mining of known
resources at Phoenix and Edwards,
the acquisition of M15/552 now enables Bullabulling Gold to more
fully evaluate potential resource extensions in certain key areas.
Three priority targets have been identified based on their
potential to positively impact the Bullabulling feasibility study
that is about to get underway.
The Edwards and Gryphon pits, located towards the southern end
of the Bullabulling trend, are small, but significantly higher
grade than the average Bullabulling grade. Scheduling of these two
pits at the commencement of the mining contributes to high gold
production and reduced cash costs early in the project, as shown in
Figure 1. However both pits are on or adjacent to the boundary of
M15/552 which, until now, has significantly limited the Company's
ability to evaluate resource potential in the immediate area.
Examination of existing data indicates that there is potential
to demonstrate continuity of mineralisation between the two
deposits. This would not only add to resource inventory, but could
enable the two pits to be combined, reducing overall strip ratio
and improving mining efficiency. There is also the potential for
mineralisation at Edwards and Gryphon to extend down dip into M15
/552 (see Figure 4). RC drilling programs are being designed to
test the potential in both these areas.
Towards the southern end of Phoenix, mineralisation at the base of the pit
is also higher than average grade. Figure 1 shows higher gold
output and declining costs late in the project life when this area
is mined in the preliminary PFS schedule. As an historic pit is
located right against the lease boundary in this area, it has not
been possible for Bullabulling Gold to drill test potential
extensions to the higher grade mineralisation. Ownership of M15/552
will now make this possible.
A limited number of RC holes are now being planned to be drilled
from M15/552 targeting the down dip projection of the current
resource. As the outcome of resource extensional drilling at
Edwards, Gryphon and Phoenix will
influence feasibility study pit designs, it is intended to commence
the planned drilling programs during the current quarter.
Regional Exploration
During the December quarter, assay results and geological logs
from two stratigraphic diamond drill holes were provided to the
Company's geophysical and structural consultants to enable the
regional three dimensional geological model to be updated. Further
detailed surface geological mapping was also carried out to aid
interpretation.
Particular focus will be placed on interpreting the significance
of a mineralised felsic to mafic schist intersected by hole BBDE001
and modelling the granitic intrusion intersected in hole BBDE002
(see release of 30 October 2012) to
determine its impact of the prospectivity of the Bullabulling
eastern fold limb.
The above work will be assessed during the current quarter to
assist with the development of future regional exploration
strategies.
Corporate
Staff Appointments
Mark Braghieri joined the
Company's management team in November
2012 in the role of General Manager Development. Mark is a
mining engineer with extensive experience in large scale open pit
mining and will be responsible for managing the Bullabulling Gold
Project full feasibility study, and pending a successful outcome,
the construction and commissioning of the project. Further staff
appointments to the feasibility study and mine development team are
expected to be made in the current quarter.
Share Issue
The acquisition of mining lease M15/552 settled in December 2012 resulting in 13.5 million Ordinary
Shares in Bullabulling Gold being issued to Resolute Mining. The
Company now has 302,533,871 Ordinary Shares on issue with Resolute
holding 4.5 percent.
Cash Position
At the end of the quarter, the Company had cash and deposits
totalling $4.1 million.
A copy of this announcement, including all Figures referred to
above, can be found on the Company's website:
www.bullabullinggold.com
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
Rob Collins (UK Nominated Adviser)
Tel: +44 20 7523 4611 Martin Davison / Jonathan Haines
Tel: +44 20 7601 6100
Neil Boom John Gardner / Kusal Meemeduma
Gresham PR Ltd (UK media) MAGNUS Investor Relations
Tel: +44 7866 805 108 (Australian Media)
Tel: +61 8 9212 0101
jgardner@magnus.net.au
kmeemeduma@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 302.5 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 31 DECEMBER 2012
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to date
activities
$A'000 (12 months)
$A'000
1.1 Receipts from product sales and 45 79
related debtors
1.2 Payments for (a) exploration and (1,484) (6,775)
evaluation
- -
(b) development
- -
(c) production
(524) (4,181)
(d) administration
1.3 Dividends received - -
1.4 Interest and other items of a 59 431
similar nature received
1.5 Interest and other costs of finance - -
paid
1.6 Income taxes received / (paid) - 619
1.7 Other - cash balance in Auzex - 6,634
Resources Limited on
acquisition date
Net Operating Cash Flows (1,904) (3,193)
Cash flows related to investing
activities
1.8 Payment for purchases of: (a) - -
prospects
- (4,886)
(b) equity investments
(15) (53)
(c) other fixed assets
1.9 Proceeds from sale of: (a) prospects - -
(b) equity investments - -
(c) other fixed assets 1 1
1.10 Loans to other entities - -
1.11 Loans repaid by other entities - -
1.12 Other (provide details if material) - -
Net investing cash flows (14) (4,938)
1.13 Total operating and investing cash (1,918) (8,131)
flows
(carried forward)
1.13 Total operating and investing cash (1,918) (8,131)
flows
(brought forward)
Cash flows related to financing
activities
1.14 Proceeds from issues of shares, - 853
options, etc.
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)
Net financing cash flows - 835
Net increase (decrease) in cash held (1,918) (7,296)
1.20 Cash at beginning of quarter/year to 5,996 11,475
date
1.21 Exchange rate adjustments to item 1 (100)
1.20
1.22 Cash at end of quarter 4,079 4,079
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
1.23 Aggregate amount of payments to the parties included 350
in item 1.2
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 1,450
4.2 Development -
4.3 Production -
4.4 Administration 580
Total 2,030
Reconciliation of cash
Reconciliation of cash at the end of the Current quarter
Previous quarter quarter (as shown in the consolidated
statement of cash flows) to the related $A'000 $A'000
items in the accounts is as follows.
5.1 Cash on hand and at bank 329 1,996
5.2 Deposits at call 3,750 4,000
5.3 Bank overdraft - -
5.4 Other (provide details) - -
Total: cash at end of quarter 4,079 5,996
(item 1.22)
Changes in interests in mining tenements
Tenement Nature of interest Interest Interest
reference at at end of
(note (2)) beginning quarter
of
quarter
6.1 Interests in N/A
mining tenements
relinquished,
reduced or lapsed
6.2 Interests in M15/552 Acquisition - 100%
mining tenements
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 up
per security per security
(see note 3) (see note 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
7.3 +Ordinary 302,533,871 302,533,871
securities **
7.4 Changes during 13,500,000 13,500,000 9 cents 9 cents
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
7.7 Options 15,359,242 - Exercise price Expiry date
(description Various Various
and conversion
factor)
7.8 Issued during 500,000 10.20c 26 November
quarter 2014
500,000 12.56c
26 November
500,000 14.91c 2015
26 November
2016
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: 21 January 2013
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 and AASB 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.
== == == == ==
+ See chapter 19 for defined terms.
1