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Bass Metals puts further piece in place for restructuring

Mon, 12 Sep 2011 07:45:00 +0100

Bass Metals (ASX: BSM) has had its existing corporate loan facility increased by $13 million by RMB Australia Holdings Ltd as it seeks to complete the recapitalisation of the company after geological and mining setbacks at its Hellyer Mine project.

The company also plans to raise up to an additional $10.7 million through a non-renounceable rights offer to existing shareholders of one new share plus one free attaching option for every three existing shares held.

The price for each new share shall be A$0.15 and the free attaching option, which is planned to be listed on the ASX, will have an exercise price of A$0.20 each and will expire on 30 September, 2014.

Funds will be used for an aggressive exploration program across its highly prospective land holding around the Hellyer Mill in Tasmania and to complete a feasibility study on the potential to recover gold from the Hellyer Tailings, as well as for general working capital.

Helmsec Global Capital is the lead manager to the offer.

The debt facility with RMB will now total $26.6 million and is due to be repaid progressively by 30 June 2014. It follows an extensive due diligence process which included an independent technical review of the revised Fossey Mine plan by Snowden Mining Industry Consultants.

The RMB offer is conditional on completion of documentation and includes a requirement for Bass to raise a minimum of $8 million in new equity and the issue to RMB of up to a total of 86.7 million Lenders options, which will be subject to Bass shareholder approval.

Bass can draw down $9 million of the $13 million extension amount prior to the completion of the equity raising, upon which the balance will be available.

Bass is required to issue 21.7 million options for the initial drawdown and 5 million options for every $1 million drawn down thereafter on the $13 million extension to the corporate facility.

The lender options will have an exercise price of either $0.20 or a 20% premium to any equity offer price, whichever is the lower and expire on 30 September 2014.

A general meeting of shareholders is planned for 26 September 2011 to seek approval of various resolutions relating to this Tranche 1 capital raising activity. The minimum raising under the offer shall be $8 million.

Bass considers that the setbacks which occurred suddenly at its Hellyer Mine operations in early June, 2011 have been managed and that it has a robust operational plan to take it forward. The company would be encouraged by the support of RMB and the involvement of Helmsec.

Bass's shares are currently suspended at the request of the company pending certainty surrounding the entitlements offer.

Bass Metals updates market on second tranche of its fundraising initiatives

Wed, 24 Aug 2011 07:24:00 +0100

Bass Metals (ASX: BSM) is currently suspended as the company moves towards the tranche two objective to raise $20 million, which is in addition to the initial tranche of $4.3 million completed earlier in the month.

Bass said that the company is in discussions with a number of equity providers to raise new equity by way of a proposed entitlements issue to existing Bass shareholders.

Separately, RMB Resources Limited today signed a mandate to arrange an increase in the existing Corporate Loan Facility by up to $13 million, subject to RMB Resources credit approval and finalisation of due diligence.

Bass has outlined the potential funds from the second tranche are planned to be allocated to; manage a short-term working capital requirement largely associated with the Hellyer Mine Project; maintain an appropriate working capital position; and to provide adequate funding to sustain a large scale exploration program and gold tailings feasibility study.

Bass anticipates being able to provide a definitive update on the structure and timing of these fundraising initiatives on or before 31 August, 2011.

The board’s intention is to keep the company’s shares suspended, due to a view that reinstatement of trading may materially prejudice the ability to successfully complete the second tranche of financing.

Bass Metals raises A$4.3m for Hellyer Mine from first tranche of fundraising

Mon, 08 Aug 2011 08:20:00 +0100

Bass Metals (ASX: BSM) has raised a total of $4.3 million from its first tranche of fundraising to assist with the development of the Hellyer Mine operation located in Tasmania.

The funds were raised through the issue of 3.3 million convertible notes and $1 million of loan notes. Each convertible note and loan note has a face value of $1.00, a conversion price of $0.15 per share and a free attached option.

The attached option issue and the convertibility of the loan notes is subject to shareholder approval at a general meeting to be held shortly.

Bass Metals has also received a number of proposals for the provision of debt and/or equity support, in a proposed second tranche financing.

The company has retained Gresham Advisory Partners and Helmsec Global Capital to assist in evaluating and negotiating those proposals.

Bass Metals anticipates being able to provide an update on the second tranche of the fundraising by 24 August 2011.

The second tranche will fund a short-term working capital deficit largely associated with the Hellyer Mine Project, maintain a more comfortable working capital position and provide adequate funding to sustain a large scale exploration and feasibility study program.

RMB Australia Holdings has not requested advancing the scheduled repayments of the outstanding $13.6 million debt which is due to be fully repaid by 31 December 2012.

The Hellyer Mine operation is running as planned with a smooth start to the fifth milling campaign on the 1 August, 2011 and resultant lead and zinc concentrate already stockpiled and ready for trucking to Burnie Port.

The notes have the following key terms and conditions:

- Each $1.00 convertible note will convert into 6.667 shares at a conversion price of $0.15 per share.

- The convertible notes bear interest at the rate of 11% per annum payable quarterly in advance or at the rate consistent with the interest rate on any tranche two convertible note issue occurring within 3 months from the date of issue of the convertible notes if the Tranche 2 coupon rate is greater than 12.1%.

- The convertible notes have a maturity date three years from the date of issue.

- Unless converted or redeemed before the maturity date, the convertible notes must be redeemed in full on the maturity date.

Bass Metals discovery at McKay Prospect points to more resource potential near Fossey mine

Tue, 26 Jul 2011 06:15:00 +0100

Bass Metals (ASX: BSM) has made a high-grade discovery at the McKay Prospect that supports the view that the overall Fossey Trend has potential to host additional mineralisation near to the existing Fossey mine infrastructure.

The result from the first intersection validates the company’s new exploration model and comprises 7.0 metres at 22.3% zinc 9.9% lead, 3.4 g/t gold, 181g/t silver and 0.7% copper.

Results include an additional 4.1 metres of combined barite and base metal mineralisation. The entire 11.1 metre zone assayed 14.9 % zinc, 6.5 % lead, 2.6 g/t gold, 130 g/t silver and 0.7% copper.

Mike Rosenstreich, managing director, said “the very high grades are especially exciting and also consistent with some of our recent drill hits at Fossey East.

"This discovery intersection at the McKay prospect demonstrates the validity of the new models put forward by our exploration team and the credibility of the targets.

"This is not a geological horizon previously targeted in the Hellyer region, nor probably in the entire Mt Read sequence, so it has very exciting local and regional implications.”

The company is exploring for large scale, high grade polymetallic (copper-lead-zinc-silver-gold) volcanogenic massive sulphide (VMS) deposits in the Mt Read Volcanic belt, a highly mineralised VMS terrain in north west Tasmania.

On July 5, Rosenstreich told Proactive Investors that Fossey East could be the next source of ore as well as the start of a string of discoveries along this trend.

This intersection is similar to Fossey East both mineralogically and in its geological setting. The company said the "mineralisation appears from orientated core to be steep and striking grid north-south."

This drill hole targeted potential offsets of the Fossey deposit along the Jack Fault. The McKay prospect has potential for extensions both to the south and down dip.

The mineralisation occurs much deeper in the geological sequence than previously thought prospective, which highlights new untested opportunities for the discovery of additional Fossey or Fossey East scale zones of mineralisation along the Hellyer-Fossey trend.

The company's new exploration model can be applied throughout Bass's tenement holdings and opens up significant tracts of ground not previously considered prospective.

To date about 120,000 tonnes of ore has been mined representing 11% of the Fossey Mine Plan and therefore only still a small sample of the overall resource.

Bass Metals granted temporary suspension pending financing transaction for Hellyer

Wed, 13 Jul 2011 05:20:00 +0100

Polymetallic producer and explorer Bass Metals (ASX: BSM) has been granted a temporary suspension by the ASX pending 'completion of a financing transaction to support the updated operating plans for the Hellyer mine project.'

Bass has indicated the temporary suspension of the company’s securities is anticipated to be for three to four weeks, with the company in advanced discussions with several parties with the objective of raising around $25 million, largely through a convertible debt structure.

Commensurate with this the operations team is updating the HMP mine plan to generate a robust high-grade mine plan to be incorporated in its cash flow forecasts, which is also being scrutinised by independent technical consultants.

Mike Rosenstreich, managing director, earlier in the week said when the company requested a trading halt, “The company needs to recapitalise to be able to reposition itself from the unforeseen technical issues only recently encountered revolving around water inflows and ore grades.

"The newly updated operating plan appears robust and it is anticipated to provide a strong platform from which to aggressively develop our existing assets and to rebuild shareholder value eroded over the past few months.”

The funds raised, subject to successful completion of the refinancing, are planned to be deployed toward:

- Upgrading mine services such as dewatering infrastructure and funding production delays and shortfalls incurred through the June 2011 quarter (around $8 million);
- Exploration work to evaluate existing resources and generate new targets as well as completion of the Gold Recovery Feasibility study (around $6.5 million); and
- Provide a minimum cash buffer of approximately 2 months working capital (around $9 million).

Bass Metals in pre-open pending financing transaction announcement for Hellyer mine project

Mon, 11 Jul 2011 05:16:00 +0100

Polymetallic producer and explorer Bass Metals (ASX: BSM) has been granted a trading halt by the ASX pending a 'completion of a financing transaction to support the updated operating plans for the Hellyer mine project' (HMP) announcement, with the company's shares placed in pre-open.

The trading suspension of the company’s securities is anticipated to be for three to four weeks.

Bass said that the company is in advanced discussions with several parties with the objective of raising around $25 million, largely through a convertible debt structure.

Mike Rosenstreich, managing director, said “The company needs to recapitalise to be able to reposition itself from the unforeseen technical issues only recently encountered revolving around water inflows and ore grades.

The funds raised, subject to successful completion of the refinancing, are planned to be deployed toward:

Bass Metal's drilling at Fossey East reveals potential for new discoveries

Tue, 05 Jul 2011 03:15:00 +0100

Bass Metals (ASX: BSM) has recommenced in fill drilling at the Fossey East deposit and has intersected high grade mineralisation including 5.6 metres at 14.7% zinc 5.4% lead, 2.1 g/t gold, 109 g/t silver and 0.7% copper.

The results indicate the mineralisation is occurring much deeper in the sequence than previously thought, which is located immediately adjacent to the existing Fossey mine infrastructure and has potential to host additional mineralisation.

Managing director of Bass Metals, Mike Rosenstreich told Proactive Investors, "it is good to be back drilling at Fossey East, it could be our next source of ore as well as the start of a string of discoveries along this trend. Looking at the bigger picture Fossey east occurs in a geological position not previously considered prospective so that opens up large areas of ground, near the mill which have not been tested.”

In fill drilling to 25 metres spaced centres through the current Fossey East resource will continue before extensional drilling commences to fast track mine development.

In February the company established an initial resource estimate within just five months of the Fossey East discovery.

Today's results were from diamond drill hole FUD0066, drilled from underground and targeted the top of the Fossey East barite and base metal zone, within the outline of the geological resource reported previously.

The entire 22.15 metre interval of barite and base metal mineralisation assayed 4.7% zinc, 1.8% lead, 1.0 g/t gold, 45 g/t silver and 0.2% copper.

Kim Denwer, Bass’ exploration manager, said “Bass’ geologists have observed that the mineralisation is occurring much deeper in the sequence than previously thought prospective, which highlights new untested opportunities for the discovery of additional Fossey or Fossey East scale zones of mineralisation in a “pinch and swell” pattern along the Hellyer-Fossey trend.”

Bass recently resumed drilling from underground of the Fossey East prospect in Tasmania following a break as a result of mining operations limiting access to the planned drilling positions.

Bass is exploring for large scale, high grade polymetallic (copper-lead-zinc-silver-gold) volcanogenic massive sulphide (VMS) deposits in a highly mineralised VMS terrain, the Mt Read Volcanic belt, located in north west Tasmania. The aim of the program is to fast track mine development.

The current drilling program is designed to infill to 25 metres spaced centres through the current Fossey East resource outline to fast track mine planning and potential development and then test for extensions.

A total of 7 drill holes have been completed to date (FUD0066 – FUD0072), but assays remain pending for the last 6 holes.

The company is seeking a better understanding of the geometry before commencing the extensional Fossey East drilling.

Geological observations of those drill holes where assays are still pending appear consistent with the earlier drill results on which the initial resource estimate was based in terms of widths of alteration and base metal mineralisation intersected.

Interestingly, the most recent drill hole completed intersected 3.4 metres with conspicuous chalcopyrite mineralisation, visually estimated +2% Cu, within the base metal zone.

To date about 120,000 tonnes of ore has been mined representing 11% of the Fossey Mine Plan and therefore only still a small sample of the overall resource.

On June 20 Bass Metals announced it is on target to achieve the forecast 44,000 tonnes of ore production for June at the Fossey Underground Mine, with a total of 35,000 tonnes of ore mined since the start of June.

Bass Metals on track to produce 44,000 tonnes of ore at Fossey Mine in June

Mon, 20 Jun 2011 03:02:00 +0100

Bass Metals (ASX: BSM) is on target to achieve the forecast 44,000 tonnes of ore production for June at the Fossey Underground Mine in Tasmania, with a total of 35,000 tonnes of ore mined since the start of June.

This marks an improved performance of the Hellyer mining operations since last updated on June 7 2011, when several unexpected operational matters occurred relating to dewatering and head-grade performance.

The company is bullish that the Hellyer Mine project has a positive outlook and work is ongoing to make the project more robust.

In addition, Bass continues to drill at the Fossey East deposit where it is looking to extend the ore body further.

The mining of high-grade stope has lifted the overall head-grade and the mill is operating well with zinc head-grade now averaging 5.6% for the campaign, up 14% on previously reported levels.

The fourth milling campaign has been underway since the 23rd of May 2011, with the campaign due to be completed on Thursday, June 23.

Concentrate production is strong and within saleable specifications, and planning is underway aimed at providing a higher grade, more robust and flexible mine plan.

Mike Rosenstreich, Bass’ managing director, said “the company has a high-grade polymetallic project with excellent potential to grow through exploration success.

"Recent technical challenges are clearly manageable, as indicated by the improved ongoing operational performance, and we are working hard to make the project even more robust.”

The company is still reviewing and assessing the overall financial and longer term operational plan, but considers it to be sound.

The high-grade nature of the mineralisation provides the flexibility to consider modifications to the underlying mine plan should the need arise.

The company is now focusing on the infill diamond drilling program currently being modelled.

Given the two week delay to the development, Bass is currently reviewing scheduling of ore production and milling, and all operating costs.

To date about 120,000 tonnes of ore has been mined representing 11% of the Fossey Mine Plan and therefore only still a small sample of the overall resource.

The original Fossey Mine Plan was based on the 25 metre spaced diamond drilling undertaken from surface; the grade-control diamond drilling from underground to infill that spacing was completed on 30 May 2011.

Work is in progress to complete the logging and assaying of that grade control drill-core and update the current resource model to reconcile with production to date and if necessary produce a revised Mine Plan. This is expected to be completed shortly.

Ore haulage from the mine for this campaign so far is about 61,400 tonnes and is currently being sourced from three stopes on the 465 level.

The company said two of these stopes (one high-grade one lower-grade) are performing as planned with respect to tonnes and grades, with the third traversing an unpredicted lower grade zone resulting in the overall mined grades falling unexpectedly in early June.

Bass Metals has since been focusing on mining the other high-grade stope, and this has resulted in a higher and more consistent feed grade to the mill, trending close to the original planned head grade of 6% zinc for the current campaign.

There are only 70 metres of decline development remaining to complete access to the base of the planned mine, which will enable establishment of the main 445 ore extraction level and a final permanent water pumping station.

Decline development and 445 level access development has been delayed by several weeks due to the water-in rush event reported on 7 June.

The water flow, whilst still at high (100 litres/sec) levels, is being well managed and the current dewatering rate for the mine is estimated to be 160 litres/second, well below the overall expanded dewatering capacity of 300 litres/second.

Importantly, level development on the 445 level and in the decline resumed over the weekend of 18-19 June.

The Mill is operating normally and the average zinc head grade has improved significantly, and more high-grade ore is planned to be treated to complete the campaign, providing an encouraging outlook.

The following quantities of concentrates are estimated to have been produced in the current milling campaign to date:

- 3,484 tonnes of zinc concentrate grading 51% zinc and 107 g/t silver, 1.0 g/t gold.
- 1,797 tonnes of lead concentrate grading 54% lead and 757 g/t silver, 2.5 g/t gold.
- 185 tonnes of copper concentrate grading 17% copper, 5,959 g/t silver, 8.9 g/t gold and 9.7% lead.

Bass Metals provides update on operations at Hellyer Mine

Tue, 07 Jun 2011 02:37:00 +0100

Bass Metals (ASX: BSM) has updated the market on its mining operations at the Hellyer Mine in North West Tasmania, while advancing the Fossey decline.

A fault structure was intersected while advancing the Fossey decline resulting in a high water ingress rate into the decline estimated to be approximately 80 to 100 litres/sec.

An upgrade to the dewatering infrastructure was quickly installed and this set-up is managing the water inflow adequately.

This increased water ingress is occurring below the current ore production level which is at the 465 metre level and is presently not affecting the current stope areas. Ore production is continuing and there were only relatively minor disruptions when the operational focus was on installing additional dewatering services.

Since Sunday 5 June there has been an easing in the rate of water inflow. In the past, water flow from similar structures, but at lower flow rates has dissipated after several days to weeks. The total outflow being pumped from the mine peaked in the range of 150 to 200 litres/sec. which is the current maximum capacity of the dewatering system.

Despite this, the latest update indicated the Hellyer Mill is continuing to achieve good availability, throughput and recovery despite reduced grades to date, with the lead circuit modifications clearly improving lead performance.

The mill is operating successfully but the average zinc grade over the 3 to 4 days up to Friday 3 June has been persistently below expectation. The anticipated zinc head grade was approximately 6% based on ore sourced and blended from 3 stopes.

The average zinc grade through the Mill during the current, fourth milling campaign has been 4.9%, i.e. 18% less, with a similar trend for lead grades.

The fourth milling campaign is underway and has so far treated about 30,000 tonnes and still has another two weeks to run.

Concentrate production for the current campaign is estimated to comprise:

- 1,662 tonnes of zinc concentrate grading 51% zinc and 115 g/t silver, 1.0 grams per tonne (g/t) gold.
- 774 tonnes of lead concentrate grading 51% lead and 832 g/t silver, 2.5 g/t gold.
- 133 tonnes of copper concentrate grading 16% copper, 5,500 g/t silver, 8.9 g/t gold and 9.8% lead.

The mill is operating successfully but the average zinc grade over the 3 to 4 days up to Friday 3 June has been persistently below expectation.

The anticipated zinc head grade was about 6% based on ore sourced and blended from 3 stopes.

However, the average zinc grade through the Mill during the current, fourth milling campaign has been 4.9%, i.e. 18% less, with a similar trend for lead grades.

Early reconciliation analysis indicates one of these three stopes is underperforming grade-wise and the company has adopted a cautionary approach by reporting this position, recognising that it is too early to draw any firm conclusions on the grade distribution.

To date about 120,000 tonnes of ore has been mined representing 11% of the Fossey Mine Plan and therefore only still a small sample of the overall resource.

The original Fossey Mine Plan was based on the 25 metre spaced diamond drilling undertaken from surface; the grade-control diamond drilling from underground to infill that spacing was completed on 30 May 2011.

Work is in progress to complete the logging and assaying of that grade control drill-core and update the current resource model to reconcile with production to date and if necessary produce a revised Mine Plan. This is expected to be completed in 3 to 4 weeks time.

The company said it is in the process of resolving these unexpected technical issues and it is too early to make any accurate assessment of the potential production and financial impact of these issues on the Hellyer Mine project.

Bass Metals in pre-open pending Hellyer Mine project update

Fri, 03 Jun 2011 03:27:00 +0100

Bass Metals (ASX: BSM) has been granted a trading halt by the ASX, with the company's shares placed in pre-open.

Bass Metals requested the halt 'pending the release of an announcement regarding an operational matter at the Hellyer Mine project.'

The trading halt will last until the earlier of the commencement of trade on Tuesday 7 June, or when the announcement is made.

The Hellyer Mine project has planned annual production estimates of; zinc concentrate 55,000tpa, lead concentrate 27,000tpa and copper / silver concentrate 5,000tpa.

Bass customers comprise Nyrstar & LN Metals.

Bass Metals in a trading halt pending capital raising announcement

Mon, 11 Apr 2011 03:00:00 +0100

Bass Metals (ASX: BSM) has been granted a trading halt by the ASX, pending a capital raising announcement by the company.

Bass has not yet indicated where the potential new inflow of funds will be allocated, but the company has recently recorded a string of top VMS hits at the Hellyer Mine Project, located in north west Tasmania.

Last month drilling at Switchback intersected a zone of base metal sulphide clasts that included; 0.6 metres (a single clast) that assayed 26.8% zinc, 17.7% lead, 163 grams per tonne (g/t) gold, 1.4g/t silver and 0.5% copper.

Bass previously intersected 3.95 metres at 5.9% zinc, 2.4% lead, 79g/t silver and 1.1g/t gold 120 metres to the east, highlighting the significant mineralisation in the area.

The Switchback target is located about 2 kilometres south-east of the Hellyer Mill, along the Fossey Portal access road, where the company has commenced production.

The planned ore treatment rate is 500,000 tonnes per annum (tpa), through the Hellyer Mill to produce 55,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 5,000 tpa of copper-silver-gold concentrates.

Bass Metals granted up to A$7m debt facility for Hellyer Mine Project

Mon, 04 Apr 2011 04:07:00 +0100

Bass Metals (ASX: BSM) has accepted a credit approved offer to extend its debt facilities by up to $7 million to fund exploration and feasibility projects at its Hellyer Mine Project (HMP), if required.

The funds will also be used for additional working capital for the HMP, located in north west Tasmania.

Following the completion of commissioning and ramp-up activities at the HMP at the end of March, 2011 and a technical review by RMB Resources Ltd, Bass accepted the extension.

The new facilities provided by RMB Resources, an experienced mining finance house, increase the company's financial capacity to support unexpected technical issues in the HMP which might arise and the flexibility to increase the level of exploration and feasibility study activity.

The structure of the extended facilities comprises a $5 million working capital facility and a $2 million extension to the existing $12 million project loan facility.

In a statement the company said "the facilities have been offered on terms and conditions which include ongoing technical review, fees and interest charges on similar terms to the original project facility and the issue of up to 7 million options over Bass shares subject to the level of drawings but do not include any requirement for additional hedging."

The company plans to repay the facilities from HMP cash flows, with the extended project facility sheduled to be repaid by 31 March 2012 and the working capital facility by 31 December, 2012.

Bass Metals has recently completed its second milling campaign.

Mike Rosenstreich, managing director, said “the March quarter was all about commissioning and ramp-up, and given the operational results to date, the June quarter is poised to complete that ramp-up process and be largely a full-scale production quarter."

On March 16 Bass Metals received further encouraging drill results at its high-grade polymetallic volcanogenic massive sulphide (VMS) deposits within the HMP.

Progress is being made at three copper-lead-zinc-silver-gold prospects and a new high-grade drilling intercept has confirmed the potential at the Switchback target.

Bass Metals set to produce zinc concentrate for export at Hellyer

Fri, 11 Feb 2011 05:49:00 +0000

Diversified miner Bass Metals (ASX: BSM) is poised for cash flows from the Hellyer Mine project with the shipment of zinc concentrate from the Port of Burnie.

Bass has now commissioned the filtration circuit to produce zinc concentrate, placing the company in the final phase of the Hellyer development plan.

The first milling campaign of around 25,000 tonnes of ore has been used for commissioning of the mill including filling of float cells, thickeners and stock tanks, as well as concentrate production.

This includes the first shipment of 500 tonnes of zinc concentrate scheduled for ship loading next week.

Mike Rosenstreich, managing director, said “This Mill commissioning has progressed particularly well given that in the late 1980s it took three years to fully commission the Mill on Hellyer ore, in 2006 it took 3 weeks to commission on tailings feedstock and this time it has taken approximately one week to attain steady state throughput and create a marketable product.”

In January 2010, Bass signed a committed off-take contract with leading global multi-metals business, Nyrstar, for all zinc and lead concentrates produced from the current Fossey Mine.

Bass Metals managing director Mike Rosenstreich lifts stake

Thu, 02 Dec 2010 13:16:00 +0000

Profitable base and precious metal producer Bass Metals (ASX: BSM) managing director Mike Rosenstreich has lifted his interest in the company acquiring 418,410 ordinary shares at $0.239 per ordinary share pursuant to a shareholder resolution in November.

Bass Metals in a trading halt pending announcement on new exploration results

Mon, 29 Nov 2010 16:39:00 +0000

A trading halt has been granted by the ASX to polymetallic miner Bass Metals (ASX: BSM) pending an announcement by the company of new exploration results.

Bass has not yet announced which project the results relate to, but earlier in the month the company reported an increase to the Fossey Ore Reserve and identified a major 3 to 5 million tonne base metal sulphide resource immediately beneath the current Hellyer Mine workings, further increasing mine life at its Hellyer Mine project in North West Tasmania.

The Fossey East discovery has not been included which is currently still being drilled, with the ore reserve tonnage at Fossey increasing by 34% to 1.1 million tonnes.

Bass Metals' high grade base and precious metals hits add to Fossey resource

Wed, 03 Nov 2010 09:42:00 +0000

Bass Metals (ASX: BSM) has reported further encouraging drilling results at the Fossey deposit, within the Hellyer Mine Project in Tasmania, with an intercept of 6.9 metres at 14.2 % zinc, 6.6 % lead, 0.6 % copper, 135 g/t silver and 1.8 g/t gold, providing additional information on a lens of massive sulphide mineralisation.

Bass is currently following up on recent discoveries at Switchback and Fossey East which are high-grade and located in close proximity to existing mine and milling infrastructure.

Drill hole HLD1016, a geotechnical hole targeted at the Easy Street Fault, intersected the edge of the Eastern Lens, one of the minor lenses included in the inferred resources at the Fossey deposit.

As well as the 7 metre zone from 123.8 metres down-hole, there were also several narrow and very high grade zones such as 1.3 metres at 53% combined Pb and Zn.

This lens is very disjointed by faulting and late basalt dykes and this drill hole provides additional information on this zone of Inferred Resource.

These results indicate the potential for a modest tonnage, high grade resource in the Eastern Lens that is potentially mineable when mine development from Fossey to Hellyer is put in place.

With the completion of the geotechnical drilling, Bass has resumed drill testing of the exciting new and distinct Fossey East target.

Bass’s larger transformational Hellyer Mine Project is on track to commence production toward the end of 2010.

With an initial through-put rate of 400,000 tonnes per annum (tpa), the 1.5 million tpa capacity Hellyer Mill will produce 53,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 4,500 tpa of copper—silver-gold concentrates.

On October 28 Bass commenced a $1.7 million definitive feasibility study (DFS) on further gold production, that could add 40,000-110,000 oz of gold in annual output from Hellyer.

In addition, the company raised $3.55 million through a share placement to mainly European institutional investors at 25 cents per share to fund growth.

With a feasibility study underway and increased funding, a positive DFS could add 50,000+ ounces of gold production worth $67m-$100m+ in revenues, yet Bass is valued by the market at only $53m.

BSM had $A16.38 million cash at the end of the September quarter.

Bass Metals raises A$3.55m, begins $1.7m Hellyer gold processing feasibility study

Thu, 28 Oct 2010 09:52:00 +0100

Bass Metals (ASX:BSM) has commenced a $1.7 million definitive feasibility study (DFS) on further gold production, that could add 40,000-110,000 oz of gold in annual output from Hellyer.

In addition, the company has raised $3.55 million through a share placement to mainly European institutional investors at 25 cents per share to fund growth.

Bass's transformational Hellyer Mine Project in North West Tasmania is on track to commence production toward the end of 2010.

The company is targeting production of 110,000 ounces of gold equivalent (based on a 1:70 gold silver ratio) production per year, with a conservative base case position of 40,000 ounces of gold equivalent per annum.

The scoping study, which identified 3 operating scenarios, indicates a potential annual operating surplus range of between $25 to $55 million per year subject to the process route selected at current gold and silver price levels and the viability of these process routes.

The company’s confidence to commit to this significant study programme is based on production forecasts that are based largely on detailed testwork undertaken mainly in the 1990’s, much of it to feasibility study levels.

Also, the gold price is approximately 3-4 times higher than in the late 1990’s and over the past 10-15 years there have been important technical advances in gold recovery and engineering technologies.

In addition, Bass owns the 1.7 million ounces of contained gold equivalent in Mineral Resources, reported in accordance with the JORC Code 2004, that would initially underpin this production.

The most substantive resource is the Hellyer Tailings which is an “above ground” resource with a gold equivalent grade of 4.1 g/t.

The DFS is expected to take 12 to 18 months to complete to a level considered “bankable”.

It will comprise all the elements typical of this type of study including resource modelling, reserves, mining, metallurgical optimisation, piloting, process engineering, plant engineering, estimates of capital and operating costs, financial evaluation, environmental planning and ultimately implementation and operating plans.

Bass has already commenced the process of collecting approximately 2 tonnes of tailings material for the metallurgical testwork which is planned to commence in November, 2010.

As well, Bass has applied for Exploration Licences covering nearby potential limestone resources which will be evaluated as a source of important neutralising reagent, which is currently considered to be supplied from commercial sources within Tasmania and represents a significant operating cost in all three operating scenarios.

Mike Rosenstreich, managing director, said “our targets for gold may appear
aggressive but a possible production scenario of between; 40,000 to 110,000 ounces gold equivalent a year would provide a very profitable addition to our Hellyer revenues."

"The technical, resource and processing assumptions are well founded and with possible base metals credits not currently factored in, this is clearly a project that warrants significant funding and attention from Bass, now that we have the people to drive the project.”

“This project represents an important part of our strategy of pursuing organic and
transactional growth opportunities to add additional profit streams to the Hellyer operations,” Rosenstreich added.

The proceeds of the placement will supplement the company’s discretionary funds available to fast track exploration drilling at the Fossey East discovery and fund the Gold Recovery Feasibility Study and the Heavy Media Separation study.

This funding strengthens a recent $5 million silver based financing, to provide working capital support to the Hellyer Mine Project (HMP) development as well as funding these growth initiatives.

Rosenstreich added “shareholders expect us to chase these growth opportunities aggressively and given the constraints on discretionary expenditure of the secured project loan facility for the HMP, and the support from the institutional investors it was a great opportunity to top-up the liquidity of the company to be able to meet those expectations."

Bass has an active and successful exploration programme and is currently following up on recent discoveries at Switchback and Fossey East which are high-grade and located in close proximity to existing mine and milling infrastructure.

Article Highlight

With a feasibility study underway and increased funding, a positive DFS could add 50,000+ ounces of gold production worth $67m-$100m+ in revenues, yet Bass is valued by the market at only $53m.

Bass Metals in trading halt pending capital raising

Tue, 26 Oct 2010 08:43:00 +0100

Perth-based Bass Metals (ASX:BSM) has requested a trading halt pending release of an announcement about a capital raising.

The halt will last until an announcement is made or commencement of trading on Thursday 28th October 2010.

On October 13 Bass Metals reported that mine development and mill refurbishment is on track for first concentrate sales in January 2011 at its Hellyer Mine Project, as well as a new production growth initiative underway.

Vicarage Capital places NPV of A$104m on Bass Metals' western Tasmania projects

Thu, 21 Oct 2010 11:25:00 +0100

UK corporate advisory group Vicarage Capital has written a research report on Bass Metals (ASX: BSM) evaluating its proposed mining activities in western Tasmania, producing a NPV (5% discount) of A$104M, with project capital repayment within the first year.

The report was prepared following a three day field trip to Bass’s Hellyer mill & associated mine sites in West Tasmania & the BSM corporate offices in Perth, Australia.

Ticker: BSM; R2F
Exchanges: ASX; Berlin & Frankfurt
Recent Price: A$ 0.29
52 week Hi/Lo: A$ 0.339 / 0.155
Market Cap: A$ 49.4M

Bass Metals is an exploration, development & production company, focused on its high grade poly-metallic (Zn, Pb, Cu, Ag & Au) projects in western Tasmania.

The company is nearing the end of current mining activities at its Que River property & is expected to begin production at its Fossey deposit using the Hellyer milling & concentration plant it is currently refurbishing in January 2011.

Bass has been producing ore from its Que River deposit since 2007, with ore being sold to the nearby MMG Roseberry mill. The initial mine plan was completed at the end of September 2010, with a program of reinstatement started ahead of care & maintenance, whilst further mine development programs are considered.

BSM acquired the Hellyer mine licence in 2005 & the Hellyer mill in 2008. BSM has reviewed historic data & following targeted drilling, has identified further production targets, including the delineation of the Fossey deposit, Probable 824kt 14.2%Pb+Zn (JORC) located 100m from the Hellyer mine and missed by the previous owners.

Decline construction is at >840m length (of 911m) & ore mining is anticipated to begin in mid November 2010.

BSM acquired the Hellyer mill facility in 2008 for A$4M. The mill was built in 1989 with 1.5Mt/yr capacity, & has an estimated replacement value of over A$100M.

BSM is presently >80% of the way through a A$20M refurbishment of this facility & construction of the Fossey mine, with the intention of processing 400kt/yr & producing separate Pb, Zn & Cu concentrates (all including precious metals), beginning January 2011.

Ore is to be supplied from the Fossey deposit (~2 years ore supply) initially. Following Fossey, BSM intend to mine remnant ore from the Hellyer mine Indicated & Inferred 750kt @ 11.1%Pb+Zn (JORC), as well as from Que River Indicated & Inferred 680kt @ 8%Pb+Zn (JORC) providing a further 2-3 years mill life.

However current BSM exploration work immediately east of the Fossey deposit has identified a potential ore body (Fossey East) that could extend the life of the Fossey mine before BSM is scheduled to re-enter the Hellyer mine.

BSM has been assessing the viability of supplying ore from the Hellyer tailings dam (using the existing dredge) to make use of the excess capacity (1mt/yr) of the Hellyer Mill.

An Indicated & Inferred resource of 9.5Mt grading 5.3%Pb+Zn, 104g/t Ag, 2.6g/t Au 0.2%Cu (JORC) is understood to be present here. Evaluation of the potential implementation of a refractory gold recovery facility at the Hellyer mill is also being undertaken, with three options available to BSM.

BSM has a number of other properties in its portfolio, these include a number of exploration & development projects, most notable are the Mt. Charter deposit, containing Indicated & Inferred resource of 6.1Mt grading 1.2g/t Au, 35.5g/t Ag, 0.5%Zn (JORC) at surface; the Lake Margaret Copper erratic exploration project; & the Venture Minerals (VML: ASX) Fe-Sn-W JV.

Significant shareholders in BSM are Metals Finance Ltd 15.5%, JP Morgan Nominees 6.7% and Management 18.0%.

Bass Metals locks in high silver price selling 558,000 ounces at A$26.04

Wed, 20 Oct 2010 09:00:00 +0100

To lock in decade high silver prices, Bass Metals (ASX:BSM) has sold forward 558,000 ounces of silver at an effective price of A$26.04 per ounce.

The hedging program equates to 27% of the payable silver planned to be recovered to concentrates, and sold from the Fossey deposit.

The hedging program, which is with RMB Resources Ltd, includes a A$5 million cash prepayment, with these funds used to support the Hellyer Mine Project, with a focus on near term growth initiatives.

The sale price is a 33% above the A$19.54 per ounce silver price assumed in the definitive feasibility study for the Fossey mine development.

Spot silver is currently around A$23.80.

Gold and silver is estimated to represent 32% of the overall sales revenue from the Fossey deposit.

Bass Metals announces further boost to earnings for Fossey Mine

Wed, 13 Oct 2010 11:33:00 +0100

Polymetallic miner Bass Metals (ASX:BSM) has reported that mine development and mill refurbishment is on track for first concentrate sales in January 2011 at its Hellyer Mine Project, as well as a new production growth initiative underway.

There is a 25% increase in forecast earnings before interest and tax (EBIT) for Fossey Mine, within the Hellyer Mine Project, from $55M to $69M by incorporating current metal prices.

Increased production by mining of lower grade disseminated mineralisation, possibly with a pre-concentration circuit is being investigated to increase mill utilisation, lower unit costs and increase cash flow.

Mike Rosenstreich, managing director, said “this is a very positive outcome which further strengthens the robust project financials, particularly given that the underlying technical plan was updated for both adverse and beneficial changes since the Hellyer Operating Plan (HOP) was completed in March 2010.”

The Fossey decline is at approximately 850 metres. Current mine development activity is focussed on connecting the decline to the pilot drill hole for the first of two vertical ventilation shafts to enable the commencement of 212 metres of raise boring of the shaft.

Drilling of the pilot hole for the second ventilation shaft is planned to commence shortly. Water ingress into the decline remains high but is being managed by the recently upgraded mine dewatering system and connection to grid power.

In the second half of October the mine development activity will widen to include development of the first ore extraction level (465mRL) as well as continuation of the decline.

Bass expects first ore to be intersected by the development drives on the 465 level in mid November and stoping production to commence in late December.

The refurbishment of the Hellyer Mill is progressing well and is approximately 85% complete. Commissioning of some components of the Mill circuit has already commenced.

Commissioning the entire circuit will commence in November, initially with waste rock and then approximately 20,000 tonnes of Que River mineralised waste.

The HMP is forecast to generate EBIT of $25 to $35 million per year based on current metal prices and exchange rates. In the first two years alone, when Fossey is mined, the forecast EBIT is approximately $69 million.

“The strong earnings and cash generating potential of the HMP will provide the capital that Bass plans to employ to grow its business,” added Rosenstreich.

A further positive aspect is that the rise in co-product commodity prices has further reduced the benchmark C1 cost of production to US$0.12/lb payable zinc after credits, placing the HMP well into the lowest quartile of world production costs.

The production profile of the Hellyer operations is not “Mill” constrained. Bass has substantial growth potential through its existing infrastructure and resources, namely, an underutilised mill and extensive low-grade as well as high-grade Mineral Resources.

Bass has commenced work with Como Engineering to assess an exciting opportunity to increase metal production and cash-flow. The large 1.5 mtpa capacity of the Hellyer Mill provides Bass with the operational flexibility to process any additional amenable ore delivered to the Run of Mine (ROM) stockpile.

The company said it is therefore possible to achieve additional production growth from existing hard-rock resources by lowering the mine cut-off grade to include disseminated/lower grade ore types, either on a “stand-alone” or an incremental ore basis.

Bass believes this scenario could be further optimised with the inclusion of a pre-concentration module such as a Heavy Media Separation (HMS) plant which would up-grade the metal content of the feed grade into the flotation circuit of the plant, reducing processing costs.

This growth opportunity has potential near term application at Fossey where the total mineralised zone comprises 2.3 million tonnes at approximately 5% Pb + Zn of which 0.8 million tonnes is the high grade massive base metal sulphide lens (15% Pb + Zn) comprising the Ore Reserve.

The Hellyer Mineral Resource also has a significant stringer zone style mineralisation with typical grades of 0.3% Cu, 3% Pb, 5% Zn, 52 g/t Ag and 0.9 g/t Au, which could be viable without pre-concentration.

This material is could be amenable to preconcentration and has significant potential for major resource upgrades as it has not been targeted specifically for resource drilling.

Inclusion of lower grade material on either a “stand-alone” or incremental cost basis has the potential to add ore tonnes to the processing schedule resulting in better mill utilisation and an increase in metal production.

Inclusion of a pre-concentration module could improve metal recoveries, lower costs and reduce utilisation of the tailings dam.

“Bass Metals is clearly on the cusp of a major growth phase based on existing resources and proven technologies,” Rosenstreich said.

“Our next mine - Fossey - is poised to commence production, with mine development and Mill refurbishment activities on track to start processing Fossey ore and achieve first concentrate sales in January 2011."

"Furthermore, we are assessing several exciting opportunities with strong potential to more fully utilise the large Hellyer Mill and increase metal output and cash flow,” Rosenstreich added.

Bass Metals' discovery at Fossey East heralds potential mine extension at Hellyer

Mon, 11 Oct 2010 10:19:00 +0100

Polymetallic miner Bass Metals (ASX:BSM) has confirmed with diamond drilling a new high-grade zone of massive base metal sulphide mineralisation to the east of the Fossey Deposit, with results including 12.1 metres at 0.6 % copper, 4.8% lead, 9.1% zinc, 76 g/t silver and 1.9 g/t gold.

Fossey East is a new massive sulphide lens located approximately 50 metres to the east of the planned Fossey mine development, which forms part of the company’s transformational flagship Hellyer Mine Project in North West Tasmania.

The mine is well advanced and on track for commissioning and production ramp-up commencing November 2010.

The second drill hole (HLD1015) is within a 30 metre zone of alteration 30 metres down-dip of the Fossey East discovery and confirms an additional high-grade massive sulphide lens.

Mike Rosenstreich, managing director, said “this intercept demonstrates ore grades over mineable widths and confirms the down-dip expansion and continuity of this high-grade discovery at Fossey East."

"Whilst we have no idea what size this lens is, we do know it is close to the Fossey underground workings and therefore easily accessible for drilling and hopefully for economic mining.”

Fossey East is in close proximity to Fossey Mine infrastructure currently in development and represents an exciting opportunity for Hellyer mine project to increase or extend production.

The intercept was within a 30 metre zone of barite dominant alteration grading 0.3 % copper, 0.2.3 % lead, 4.7 % zinc, 55 g/t silver and 1.3 g/t gold. HLD1015 was designed to test the down-dip continuity of the 2.5 metre high-grade intercept in HLD1014 reported on 5 October.

The top of the zone occurs within 15 metres of the Fossey decline, which is currently under development. This new mineralised zone is open down-dip and to the
north and south.

The drilling rig has been diverted to undertake a geotechnical drilling programme related to the Fossey mine development and will return to Fossey East exploration drilling in late October 2010.

Bass plans to fast track the evaluation of this new discovery for inclusion in its mining and milling schedule, subject to drill access and budgets.

On September 28 Bass completed the $12 million project financing for the Hellyer Mine and the loan facility has been fully drawn.

The miner is in a strong financial position, with a A$9.5 million cash balance and a A$8.3m working capital position, as reported in its full-year financial report.

Bass' Hellyer mine is throwing off such strong cash flows that it is not surprising that investors are re-rating the stock in line with cash flow per share.

Bass Metals finds new base and precious metals zone east of Fossey Mine

Tue, 05 Oct 2010 10:52:00 +0100

Polymetallic miner Bass Metals' (ASX:BSM) diamond drilling has intersected a zone of strong alteration and base metal sulphide mineralisation to the east of the Fossey Deposit with 2.5 metres at 0.3 % copper, 3.8 % lead, 6.3 % zinc, 56 g/t silver and 1.8 g/t gold.

The Fossey Deposit is located at the flagship Hellyer Mine in North West Tasmania which is well advanced and on track for commissioning and production ramp-up commencing November 2010, and will mark the transition and transformation of BSM toward mid-tier zinc, lead and copper producer status.

The high-grade base and precious metals intercept is within a 25 metre zone of alteration 50 metres east of the Fossey Deposit and is interpreted as the top of a new high‐grade massive sulphide lens.

It is in close proximity to the Fossey Mine infrastructure that is currently in development. The zone comprises barite rich alteration similar to the Fossey style alteration envelope that surrounds the high-grade Fossey copper-lead-zinc-silver-gold deposit.

The new zone contains several narrow discrete intervals of massive base metal sulphide mineralisation. Within the 25 metre zone of barite dominant alteration grades include 0.1 % copper, 0.7 % lead, 1.7 % zinc, 31 g/t silver and 1.0 g/t gold.

This new mineralised zone is open down-dip and to the north and south as shown in an interpreted cross section and long-section.

Mike Rosenstreich, managing director, said this is a very exciting growth opportunity for the Hellyer Mine Project to extend or increase production of zinc, lead and copper-precious metals concentrates if further drilling confirms the down dip expansion and continuity of the high-grade massive base metal sulphide zone.

Importantly, the potential for this new mineralised structure is completely open-ended and given the close proximity to the Fossey decline, Bass said it is is hopeful of achieving some economic benefit from this discovery.

A second drill hole is in progress to test the down-dip potential and further results will be reported when assays are available.

Bass Metals confirmed a third mineralised intercept from diamond drilling at the new Switchback target within the Hellyer mine lease on Septemeber 29, confirming excellent potential to define a sizable resource with further drilling.

On September 28 Bass completed the $12 million project financing for the Hellyer Mine and the loan facility has been fully drawn.

The miner is in a strong financial position, with a A$9.5 million cash balance and a A$8.3m working capital position, as reported in its full-year financial report.

Bass Metals' Switchback target open in all directions

Wed, 29 Sep 2010 10:17:00 +0100

Polymetallic miner Bass Metals (ASX:BSM) has confirmed a third mineralised intercept from diamond drilling at the new Switchback target within its 100% owned Hellyer mine lease in north-west Tasmania, confirming excellent potential to define a sizable resource with further drilling.

The Switchback target is within close proximity to the Hellyer Mill and the Fossey underground mine which is currently in development.

The Latest drilling yields an intercept of 2.25 metres grading 8.3 % zinc, 4.3 % lead, 74 g/t silver and 1.3 g/t gold; within 11.05 metres grading 4.1% zinc, 1.8 % lead, 37 g/t silver and 0.8 g/t gold.

This is the third potentially economic intercept from the Switchback target and further highlights the exciting nature of this new discovery within the existing mine area. The high-grade massive sulphide clasts may vector exploration drilling into a new primary massive sulphide deposit.

Bass is exploring for large scale, high grade polymetallic (copper-lead-zinc-silver-gold) volcanogenic massive sulphide (VMS) deposits in the Mt Read Volcanic belt, in North-west Tasmania.

These deposit styles generally occur in clusters, and Bass’ exploration focus is around the Hellyer-Que River VMS system which occurs on its Mining Leases within 5km radius of its Hellyer Mill.

Bass's Hellyer Mine Project is on track to commence production toward the end of 2010. With an initial through-put rate of 400,000 tonnes per annum (tpa), the 1.5 million tpa capacity Hellyer Mill will produce 53,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 4,500 tpa of copper—silver-gold concentrates.

On September 13 Bass reported a FY10 A$4.4 million operating profit from the Que River Mine in north-west Tasmania.

Que River ore is currently sold to the nearby Rosebery Plant under an Ore Sales Agreement with the plant’s owner/operator, MMG Australia.

In January 2010 Bass signed a committed off-take contract with leading global multi-metals business, Nyrstar (EBR: NYR), for all zinc and lead concentrates produced from the Fossey mine.

The miner is in a strong financial position, with a A$9.5 million cash balance, a A$8.3m working capital position and a A$12m undrawn debt facility for the year ended 30 June, 2010.

On September 28 Bass completed the $12 million project financing for the Hellyer Mine and the loan facility has been fully drawn.

Bass Metals completes A$12 million financing for Hellyer

Tue, 28 Sep 2010 09:26:00 +0100

Polymetallic miner Bass Metals (ASX:BSM) has completed the $12 million project financing for the Hellyer Mine Project in north-west Tasmania, and the loan facility has been fully drawn.

RMB Resources provided the remaining funding required to complete the HMP development, following:

- Execution of a concentrate marketing and sales agreement with UK based, LN Metals International Ltd for the copper-silver-gold concentrate on favourable terms consistent with revenue outcomes, reported previously;

- Completion of additional technical due diligence by Snowden Mining Industry Consultants; and

- The issue to RMB Resources of 3 million unlisted Bass Metals options with a 3 year term and an exercise price of $0.228.

Earlier in the month Bass completed hedging comprising zinc and lead forward contracts at flat prices of A$2,460/tonne zinc and A$2,410/tonne lead.

The Bass Feasibility Study price assumptions of A$2,241/tonne and A$2,414 respectively, with Bass securing price levels for 13,656 tonnes of zinc and 8,409 tonnes of lead which represents approximately 30% of the payable zinc and lead production from the Fossey Deposit.

The Company’s larger Hellyer Mine Project is on track to commence production toward the end of 2010.

It will have an initial through-put rate of 400,000 tonnes per annum (tpa), the 1.5 million tpa capacity Hellyer Mill will produce 53,000 tpa of zinc concentrate, 27,000 tpa of lead concentrates and 4,500 tpa of copper-silver-gold concentrates.

Bass will also soon generate cash by processing remnant ore from the Hellyer mine.

Bass Metals completes hedging programme for $12 million loan facility

Thu, 16 Sep 2010 09:18:00 +0100

Polymetallic miner Bass Metals' (ASX:BSM) project financing for the Hellyer Mine is in place, after the company completed its prerequisite hedging programme for the $12 million RMB Resources project loan facility.

The hedging comprises zinc and lead forward contracts at flat prices of A$2,460/tonne zinc and A$2,410/tonne lead.

Further details in the market update from Bass included that the Fossey decline is at approximately 730 metres. with the power and water pumping system upgrade largely complete.

The raise boring process to install ventilation shafts and an emergency egress system has also commenced.

The Hellyer Mill refurbishment is approximately 70% complete, with costs to date on budjet, with commissioning on waste rock and then mineralised waste material from Que River planned to commence in November 2010.

The mining operations at Que River were completed in early September as planned, and the final ore deliveries for sale to MMG Australia at Rosebery will be completed through September.

Bass Metals reports $4.4 million profit, Hellyer production nears

Mon, 13 Sep 2010 10:49:00 +0100

Polymetallic miner Bass Metals (ASX: BSM) has reported a FY10 A$4.4 million operating profit from the Que River Mine in north-west Tasmania.

However, the prime focus for BSM during the year has been developing the Hellyer Project, with the Fossey deposit mine plan completed and the Hellyer Mill is on schedule to commence commissioning and production ramp-up by Q4 CY2010.

The miner though is in a strong financial position, with a A$9.5 million cash balance, a A$8.3m working capital position and a A$12m undrawn debt facility.

Revenues were A$18.2 million, down from A$23 million for the corresponding period a year before.

With the flagship Hellyer project well advanced and on track for commissioning and production ramp-up commencing November 2010, it will mark the transition and transformation of BSM toward mid-tier zinc, lead and copper producer status.

Bass initial growth and development has been largely funded from the profitable Que River mining operation, although Bass did conduct a A$15million capital raising during the FY10 to help fund the development of the Hellyer project and maintain a sound cash liquidity position.

Mike Rosenstreich, managing director, said the year was a transformational one in which key strategic growth milestones was achieved.

“Our strategy is to grow the Company into a diversified mid-tier mining house and we are excited that the critical stepping stone toward this is almost in place following the commencement of the A$20 million Capex programme to develop the Fossey deposit and refurbish the Hellyer Plant in January this year.”

“The operating profit result from Que River was also pleasing given that the mine was in its third year of production, more than twice its original mine life.”

The new Hellyer mine is expected to have a five year mine life and the Company is confident of extending this based on continued exploration success.

The Hellyer mill will commence at a rate of approximately 400,000 tonnes of ore a year sourced from the Fossey, Hellyer and Que river deposits, however Mill capacity of 1.5 million tonnes provides substantial scope for increased production on the back of organic enhancements, exploration success and possible future acquisitions.

“A significant advantage for Bass is the prospect of quickly commencing low cost mining operations from potential new discoveries through utilisation of existing infrastructure, including the underutilised Hellyer Mill,” said Rosenstreich.

The Company also reported significant progress toward developing a number of its key organic growth projects which will provide potentially profitable additions to the new Hellyer operations.

This includes the Hellyer Tailings re-treatment and gold recovery study projects which have the potential to process 1 million tonnes per annum of tailings to produce 60,000 tonnes per annum of bulk lead-zinc concentrate as well as adding 50,000 to 100,000oz of gold production to the Company’s annual Hellyer output.

Bass Metals encouraged by base metal intercept at Switchback target

Tue, 07 Sep 2010 09:02:00 +0100

Gold and base metal-focused Bass Metals (ASX:BSM) has reported further encouraging drill results from its Switchback target, located on its Hellyer Mine lease in northwest Tasmania.

The latest intercept comprises 3.95 metres of massive base metal sulphide mineralisation grading 5.9 % zinc, 2.4 % lead, 79 g/t silver and 1.1 g/t gold within diamond drill hole HED19.

The latest drill hole is approximately 60 metres south of drill hole HED16 which intersected 2.35 metres grading 25 % zinc, 8.7 % lead, 192 g/t silver and 4.9 g/t gold within an overall 9.25 metre zone at 8.5 % zinc, 3.3 % lead, 69 g/t silver and 1.6 g/t gold.

The latest drill intercept, like HED16 is also associated with massive sulphide clasts within a mass flow unit interpreted to have been shed from a distinct massive sulphide mound located somewhere between the Hellyer and Que Deposits.

Mike Rosenstreich, managing director, said this is a very encouraging advancement of the prospect on two fronts. Bass considers that the mass flow hosted mineralisation has resource potential and secondly that the high-grade massive sulphide clasts may vector into a new primary massive sulphide deposit.

A follow-up diamond drill hole is in progress. Bass is exploring for large scale, high grade polymetallic (copper-lead-zinc-silver-gold) volcanogenic massive sulphide (VMS) deposits in the Mt Read Volcanic belt, in NW Tasmania.

These deposit styles generally occur in clusters, and Bass’ exploration focus is around the Hellyer- Que River VMS system which occurs on its Mining Leases within 5km radius of its Hellyer Mill.

The company’s growth strategy centres on the development of a pipeline of production, near-production and exploration assets in the world-class Mount Read Volcanic mineral belt in northwest Tasmania, with strong leverage to a substantial new discovery through its extensive regional ground holding.

In December 2008 Bass Metals significantly expanded its asset base with the transformational acquisition of the Hellyer Mill and associated infrastructure, which has positioned the company as an independent, emerging mining company that is not reliant on third party ore treatment or off-take arrangements.

Bass Metals provides update on Hellyer Mine

Tue, 24 Aug 2010 10:50:00 +0100

Bass Metals (ASX:BSM) has encountered water bearing structures in the Fossey decline at its Hellyer Mine Project development in NW Tasmania, bringing extra pumping capacity to manage the unexpected water flows.

The Fossey decline is at approximately 625 metres of the 911 metre total planned decline length but its advance in recent weeks has continued to encounter significant unexpected highwater bearing structures.

Difficulties associated with these water bearing structures have been exacerbated by snow storms which have restricted access to site for several shifts.

The increased water flow has made mining activities difficult and placed the interim pumping and power supply services under maximum load, with no contingency if further such structures are intersected.

In response Bass has decided to bring forward in the development schedule the installation of permanent services and upgrade of the pumping capacity to ensure sufficient contingency.

The original planned final pumping capacity was to be 80 litres per second, which is now being upgraded to 180 litres per second. The current pumping requirement is estimated to be 50 to 60 litres per second.

The water flows have caused a further delay in the decline advance and Bass now estimates that the overall mine development is four weeks behind the original schedule.

The upgrades to the dewatering circuit and modification to the schedule is likely to result in a capital cost increase of approximately $0.7 million.

The refurbishment of the Hellyer Mill is approximately 60% complete with costs to date consistent with the planned expenditure schedule.

The issues in the underground mine development have prompted a review of the overall development and production schedule. In late July 2010, it was regarded as realistic, albeit, “tight” to have the Mill commissioned and in production in December 2010.

Bass still expects ore production from the Fossey mine in November-December, but given the recent issues in the decline development, plant commissioning will be completed prior to Christmas and then after the work force has had a break over Christmas, start treating Fossey ore early in the new Year, 2011.

In dealing with the water inflow and the installation of the extra power and given the occurrence of Christmas in the middle of that schedule it was decided to plan to start processing Fossey ore in January 2011, rather than in December 2010.

The company said in the overall scheme it is regarded as a very modest and prudent revision to the schedule.

Bass Metals receives positive results from gold scoping study

Wed, 28 Jul 2010 08:18:00 +0100

Bass Metals (ASX: BSM) has reported positive results on processing options for the economic recovery of gold, silver and possibly base metals from the Hellyer Tails resource.

The results would indicate that an economic gold recovery circuit could be added at Hellyer in Tasmania.

Metallurgical consultants, BatteryLimits Pty Ltd and Como Engineers Pty Ltd undertook the study and the results have highlight the potential for significant gold production subject to further testwork and a positive feasibility study.

The study identified three gold recovery process routes as potentially viable for the Hellyer Tailings which contain 0.8Moz gold and 32Moz silver. The three Options comprise; Direct Cyanide Leach with Cyanide Recycling (Option 1), Albion Process (Option 2) and Partial Pressure Oxidative Leach (Option 3).

The capital cost estimates for each option were estimated as follows:

- Option 1: A$49.4m
- Option 2: A$143.2m
- Option 3: A$116.8m

Estimated operating margins were very healthy for each option:

- Option 1: 43%
- Option 2: 33%
- option 3: 47%

A conceptual annualised gold recovery of 21 to 72koz and silver recovery of 1.3 to 2.7Moz was postulated across the 3 process options and conceptual total site operating cost estimates range from A$743 to $877 per ounce gold (Eq (gold & silver only).

The resource contains 0.8 million ounces of gold and 32 million ounces of silver, which combined comprise a gold equivalent resources of 1.3 million ounces.

BatteryLimits has provided a metallurgical review, process descriptions, process schematics, and process design criteria for each of the three short-listed process routes. Como Engineers has estimated capital and operating costs for each option.

The study findings are largely based on detailed assessments of a vast repository of applicable historical testwork and feasibility studies on the Hellyer tailings originating mainly from the 1980’s and 90’s; not on hypothetical data.

The major changes to contribute to the current positive assessment compared to when the viability of recovering gold from the tailings was last assessed in detail (late 1990’s), include:

- A major uplift in the gold price to approximately US$1,100 - $1,200 per ounce, compared to the sub US$400/oz prices prevalent through the previous decade.
- Improvements in technology such as recent advances in cyanide recycling (Option 1), and engineering and operation of autoclaves (Option 3). Option 2, the Albion Process was
experimental in the ‘90’s but is now being installed commercially into several operations around the world.
- The potential resource base available to utilise the technology now includes more than just the Hellyer tailings, given the resource increments Bass has achieved over the past 5 years.

The results are preliminary in nature but do demonstrate potential for a viable new operational component at Hellyer to recover precious metals.

The indicative operating cost range from A$700 to A$900 per ounce (gold eq), while not “low cost” does assume a totally stand-alone operation with no synergies from other operational activities Bass Metals may be conducting on site such as the processing of its massive sulphide resources to produce base metal concentrates due to commence in December 2010.

On the basis of these positive results Bass intends to undertake a staged feasibility study process as a high priority. The first stage will focus on final process route selection followed by a series of detailed testwork programmes, process route design and cost estimates.

The focus will be the Hellyer Tailings, but as the testwork programme develops amenability testing of other potential feed stocks may also be included.

In conclusion, Bass said it is highly encouraged by the outcomes of the scoping study recently completed by Como Engineers and BatteryLimits.

Whilst still at a very early phase the study indicates the potential of utilising proven technologies to recover appreciable quantities of gold and silver and possibly also certain base metals which could significantly enhance the production and revenue profile of its business in Tasmania.

The company has to complete further large scale sampling and testwork programmes before committing to a definitive feasibility study to determine if such an operation could be viable and how it might be implemented.

Bass said setting the staged gold recovery study objectives and budgets is now a priority.