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UPDATE: Bullabulling Gold plots busy year

UPDATE: Bullabulling Gold plots busy year

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Bullabulling Gold (LON:BGL, ASX:BAB) has confirmed that it remains on track to deliver the first full draft of the pre-feasibility study (PFS) report for its gold project by the end of this month.

The company said the key PFS activities still outstanding are: review and finalisation of the mining schedule; risk assessment; financial modelling; project development schedule; finalisation of the scope for the feasibility study.

The review of mine scheduling will attempt to bring forward higher grade ore, mined late in the project in the preliminary schedule, to address the dip in gold production during years six and seven of the mine’s life.

As with the first full draft, the final PFS production schedule and financial assessment are expected to be complete by the end of January.

This year will be a busy one in which Bullabulling makes the transition from an exploration company to a development company.

Once the PFS is out of the way, work on the full feasibility study will commence from the beginning of February 2013.

In addition to refining and confirming work carried out during the PFS, the feasibility study will evaluate a number of opportunities that have been identified with potential to improve project economics.

On the resource side these include: drilling from the newly acquired M15/552 mining lease to evaluate down dip continuation of higher grade mineralisation at the southern end of the Phoenix pit; testing for strike and depth extensions to high grade mineralisation in the Edwards and Gryphon pits.

The company is also looking to optimise its waste rock dumping strategy to reduce haulage costs. Further geotechnical studies to refine pit slope angles are also planned, which could potentially reduce waste mining.

Bullabulling said it will size up the owner-miner model as a means of reducing operating costs.

Also under consideration is the relocation of infrastructure to extend mining between the Phoenix, Dicksons and Bone Crusher pits, while the firm is also mulling inclusion of the Gibraltar project into the production schedule.

Broker Shore Capital’s Yuen Low notes that two of the pits in the north of the Bullabulling project are separated from the main pit by the Great Eastern Highway and power transition lines, respectively.

“Mining exclusion corridors stretching 100m and 200m either side of highway and transmission lines were modelled; the full feasibility study is to evaluate relocation of the infrastructure to extract resources within the exclusion zones. We believe that this could potentially extend mine life and improve project economics,” Shore Capital said.

On the processing side, Bullabulling intends to undertake additional metallurgical test work aimed at improving gold recoveries and review the tailings storage facility design, with a view to reducing construction and sustaining capital costs.

The group continues to evaluate alternative power supply options as it seeks to lower energy costs.

It is also hoping to recruit more local workers to reduce travel and accommodation costs.

At the end of 2012, the company had cash and deposits totalling US$4.1 million.

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