www.bassmetals.com.au
Bass Metals (ASX: BSM) is a growth focused and profitable Australian base and precious metal producer with a portfolio of high quality zinc, lead, copper and gold assets in the rich Mount Read Volcanic mineral belt in northwest Tasmania. Listing in 2005, Bass delivered its maiden profit in 2008 from its profitable base metals production hub at Que River in Tasmania, which has generated $25 million in cash flow over the last two years.
The Company also 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 mines and milling infrastructure. Bass has an experienced Board and operating team who have a strong track record of delivering profitable production underpinned by exploration success and are highly motivated to improve on that record.
The Company’s growth strategy centres on the development of a ‘pipeline’ of production, near-production and exploration assets in this prolific mineral belt, with strong leverage to a substantial new discovery through its extensive regional ground holding.
Vicarage Capital places NPV of A$104m on Bass Metals' western Tasmania projects
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%.
