Auzex Resources moves closer to gold resource upgrade at Bullabulling

Auzex Resources (ASX: AZX) is on track to complete its Phase Two infill drill program at the Bullabulling Gold Project by December, and expects results to add further to the resource reported in August 2011.

The reverse circulation drilling, which commenced in May 2011, completed a total of 136 drill holes for 24,212 metres in July, August and September 2011 and results reconcile well against the recent new resource model and include new high grade intersections not included in the current model.

Highlights include:

- 1 metre at 10.4 grams per tonne g/t gold;
- 5 metres at 8.75 g/t gold; and
- 5 metres at 8.05 g/t gold.

The program extends outside the current resource area and a resource update is expected in the first quarter 2012. The current reported JORC Resource is 78,836,000 tonnes at 1.03 g/t gold (2.60 million ounces contained gold) at a 0.5 g/t Au cut off. 

Importantly, the company aims to establish sufficient reserves for a minimum initial ten year mine life. Moving toward a maiden reserve will further increase the confidence levels as the project moves closer to production.

The Bullabulling gold project is strategically located 65 kilometres south-west of Kalgoorlie in Western Australia's Yilgarn basin.

Also, the company has commenced a detailed magnetic survey that will be used to develop a 3D geological model for targeting deep mineralisation.

The merger between Auzex and joint venture partner GGG Resources (ASX: GGB, AIM: GGG) is progressing well and on time for completion in February 2012.

The two companies, who are in the process of merging to form Bullabulling Gold, are working to extend their existing properties to add operational efficiencies.

An additional drilling rig has been added to the program and airborne magnetics are currently being flown to further assess the exploration potential directly due south of Bacchus pit and to assist in the planning for the deep drilling program expected to commence in the first quarter 2012.

There are currently three drill rigs working on the Phase Two program infilling the historic drilling between Phoenix and Hobbit to enable the current Inferred resources to be upgraded to Indicated resource category, thereby increasing the confidence in the current resource base.

Exploration drilling is also underway, including exploration targets to the south-east of the main Bullabulling Trend such as Sphinx, Edwards, Medusa, Gryphon, Kraken and Minotaur where previous RAB drilling has intersected widespread gold mineralisation which is expected to add additional resources to the resource figure announced in August 2011.

A key aim of the Phase Two resource drilling program is to infill the current and historic drilling to a drill spacing that allows the Inferred resources in the recently announced resource estimate to be reclassified to an Indicated resource category, and in turn enable initial JORC reserves to be established for the project.

The total remaining infill drilling from Bacchus to Bonecrusher is about 25,000 metres. At the assumed current production rates of 360 metres per day the infill drilling program should be completed by December 2011.

There are approximately 9,000 metres of infill drilling remaining in the Titan-Phoenix area, which should be completed by mid-October 2011.

Following a review of drill results at Bacchus East, the total number of metres has been increased to more effectively test the footwall lodes, with the company expecting this program to be completed by early November.

Near Surface Exploration Results

Preliminary scout exploration drilling has been completed between Edwards and Minotaur with low grade mineralisation intersected similar to that along the Bullabulling Trend.

However, this mineralisation appears to be less continuous and in the holes drilled to date have not intersected the higher grade zones of mineralisation found between Bacchus to Hobbit.

Better intersections include 11 metres at 1.16 g/t gold from 76 metres from the Kraken prospect and 2 metres at 8.71 g/t gold from 100 metres from the Edwards prospect.

A number of new holes are planned to test the full section of the ultramafic to cover both contacts on fence lines with a SW-NE orientation.

Auzex said it is clear that the historic drilling does not fully test significant areas of alluvial cover that are associated with low level gold soil anomalies to the south along the Bullabulling Trend within the newly granted Exploration Licences.

Six regional scale targets have been identified that require follow up exploration drilling, which is planned to start immediately after the infill drilling is completed.

Potential for Deeper High Grade Mineralisation

The company continued planning the Deeps exploration program with a review on the potential for using deep geophysical techniques to map the 3D geology at depth at Bullabulling completed.

A combination of detailed magnetic data will be used in combination with 2D seismic and gravity to develop a detailed 3D model of the structure and geology of the Bullabulling Trend.

This model will then be used to target mineralisation at depth. The detailed magnetic data acquisition will be carried out over the regional extent of the Bullabulling Trend and is expected to commence in mid-October.