www.bullabullinggold.com
Bullabulling Gold Limited is an Australian and UK publicly quoted mining exploration company headquartered in Perth, Western Australia. The Company is the successor entity of GGG Resources plc.
Bullabulling Gold is the 50% owner of a large previously producing mine called Bullabulling. We will acquire the remaining 50% interest in the project under an Australian court approved scheme in April 2012, subject to shareholder and final court approval.
Located in the goldfields of Western Australia, Bullabulling is within easy commuting distance of the main gold mining centre of Kalgoorlie which is less than 80kms away on the main Perth Kalgoorlie highway. The project straddles the main highway with mains power and water running through it.
The company has presently 170 million shares in issue which will rise to circa 290 million shares once Bullabulling Gold Limited acquires the remaining 50% interest in the project.
GGG Resources' Bullabulling upgrade adds to the momentum behind the stock
The market’s response was positive as GGG Resources (LON:GGG,ASX:GGB) revealed an upgrade to the gold resource at its Bullabulling project in Western Australia.
The shares advanced 0.86 pence, or 4 per cent to 23.11 pence, and are up more than 35 per cent since the middle of last week.
Earlier GGG posted a new JORC compliant estimate of 2.6 million ounces at 1.03 grams per tonne and a cut-off of 0.5 grams.
This compares with a 2004 figure of 1.98 million ounces at a cut-off 0.7 grams per tonne cut-off.
A total of 711,700 ounces have been converted from inferred to indicated status following phase-one infill drilling programme, which totaled 35,000 metres and focused on a 2.3 kilometre area between the Bacchus and Phoenix pits.
The 70,000-metre phase-two programme is already underway, and it is hoped it will upgrade a “substantial portion” of the current 1.9 million ounce inferred resource to the higher confidence indicated status in the first quarter of 2012.
This in turn should enable an initial JORC ore reserve to be estimated.
Preliminary project optimisation studies indicate potential for a “high conversion rate from resource category to reserve category” once the project economics have been finalised, GGG said.
An additional 20,000 metre exploration drill programme is also in progress targeting Gryphon, Kraken, Minotaur and Edwards on southern extension of the Bullabulling trend.
GGG jointly owns the project with Australia-listed Auzex Resources (ASX:AZX).
Managing director Jeff Malaihollo said: "The phase-one JORC update demonstrates that Bullabulling is a very large and highly continuous system capable of achieving an initial ore reserve of over 1 million ounces of gold.
“The JV has made some assumptions on costs to optimise the pits based on the current resource update. Future drilling will be done primarily within these optimised areas which should translate to a high conversion of resources to reserves.
“The phase-two drilling programme should run to the end of 2011 and this we expect this to deliver an upgrade of portions of the inferred resource to higher categories.
Drilling is also in progress on exploration targets at the southern extension of the Bullabulling Trend such as Gryphon, Kraken, Minotaur and Edwards, which we expect will provide additional resources."
City broker Northland says the resource upgrade comes solely from the adoption of a new cut-off grade of 0.5 grams per tonne rather than the 0.7 grams used to compile the original, 2004 JORC figure.
“In our recent meeting, management explained that to achieve a measured resource would require drilling of previous holes, which would not be an optimum use of capital, but that Indicated is likely to be sufficient to move forward given a high degree of continuity in resource and the extent of historical data,” explained analyst Andrew McGeary.
“Management also explained that the initial infill drilling would be unlikely to increase resource, but was expected to upgrade its status (as here).
“The next campaign is also primarily aimed at upgrading rather than extending resource through drilling will also target southerly extensions.
“Management also indicated on-going discussions aimed at resolving the Auzex takeover issue.”
GGG launched a bid for its partner in March in order to take full control of Bullabulling. The offer has been extended until September 5.
