Bullabulling Gold Limited DIAMOND DRILLING PROGRAM UNDERWAY AT BULLABULLING (7957D)

TIDMBGL

RNS Number : 7957D

Bullabulling Gold Limited

02 April 2014

2 April 2014 ASX Code: BAB, AIM Code: BGL

DIAMOND DRILLING PROGRAM UNDERWAY AT BULLABULLING

Bullabulling Gold Limited is pleased to report that a diamond drilling program has commenced at the Bullabulling Gold Project.

   --    Program to provide samples for key metallurgical and geotechnical testing 
   --    Supports completion of the definitive feasibility study by December 2014 
   --    Proposal from contractor accepted for 50% of drilling cost to be paid in Bullabulling shares 
   --    Shares to be held in escrow for 3 months from completion of the drilling program

The current program will comprise approximately 1,300 metres of diamond drilling to provide HQ and PQ diameter core samples for metallurgical and geotechnical testing required for the project to achieve definitive feasibility study (DFS) standards.

The metallurgical test-work is designed to evaluate variability across the mine area to confirm that key processing parameters adopted in the DFS are representative of the whole deposit.

This test-work will be carried out after completion of the current metallurgical program, which is further evaluating previously identified potential for reducing reagent usage and increasing gold recovery. The two key reagents of cyanide and lime accounted for operating expenditure of over $30 million per annum(1) or $170 per ounce(2) in the Bullabulling prefeasibility study. Subsequent metallurgical test-work has demonstrated potential to reduce the consumption of lime and cyanide by 64% and 26% respectively by using nanofiltration to lower the concentration of selected contaminants in the process water (see release of 12 March 2014).

The geotechnical test-work will complement existing data that was derived from the testing of earlier diamond drill core and structural mapping of the historic open pits. The results of this work will enable confirmation, and where necessary refinement, of the slope angles used in the preliminary open pit designs.

The cost of the program is expected to come in comfortably under budget, with the rates tendered by drilling contractors reflecting the current competitive nature of the mining services sector in Western Australia. In addition, the Company has accepted a proposal from the selected drilling contractor to receive 50% of the payment for the diamond drilling program in Bullabulling shares. The shares will be issued after completion of the program and will be escrowed for three months from the date of their issue. The shares will be priced at the volume weighted average price over the period in which drilling takes place, with no discount applied. This form of payment assists in preserving the Company's cash resources, which stood at $4.3 million at the end of the December 2013 quarter.

The diamond drilling program is scheduled for completion in May 2014 and will assist in keeping the DFS on track for completion by December 2014.

For information, contact:

 
 Brett Lambert                    Westhouse Securities Limited 
  Bullabulling Gold Limited        (UK Broker & Nominated Adviser) 
  Level 2, 55 Carrington Street    Martin Davison / Dominic Palmer-Tomkinson 
  Nedlands, WA, 6009, Australia    / Hugo Rubinstein 
  Tel: +61 8 9386 4086             Tel: +44 20 7601 6100 
-------------------------------  ----------------------------------------------- 
 Neil Boom                        John Gardner / Rupert Dearden 
  Gresham PR Ltd (UK media)        MAGNUS Investor Relations. Corporate 
  Tel: +44 7866 805 108            Communication. (Australian Media) 
                                   Tel: +61 8 6160 4900 
                                   jgardner@magnus.net.au rdearden@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 344 million shares on issue. The Company's primary asset is the wholly owned Bullabulling Gold Project, located 60 kilometres west of Kalgoorlie in Western Australia.

The Bullabulling Gold Project hosts JORC compliant Mineral Resources3 of 3.75 million ounces comprising Indicated Resources of 72.4 million tonnes at 0.98 g/t gold (2.28 million ounces) and Inferred Resources of 41.6 million tonnes at 1.11 g/t gold (1.47 million ounces). 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. All resources are situated on granted Mining Leases in close proximity to infrastructure.

The Company is conducting a definitive feasibility study into the development of a large scale, low cost mining operation at Bullabulling which is scheduled for completion in 2014.

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 2012 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.

Notes

1. Based on the following prefeasibility study (PFS) assumptions; cyanide cost $2.76/kg, lime cost $0.30/kg, cyanide consumption 0.91kg/t, lime consumption 5.21kg/t and annual throughput 7.5Mt. The Bullabulling PFS was released on 7 February 2013.

2. Based on forecast average gold production of 175,000 ounces per annum. Material assumptions supporting the production forecast were released on 7 March 2014.

3. The information in this report that relates to the Exploration Results, Mineral Resources or Ore Reserves was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. All material assumptions and technical parameters underpinning the estimates of mineral resources continue to apply and have not materially changed.

This information is provided by RNS

The company news service from the London Stock Exchange

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