A maiden reverse-circulation (RC) drilling program at BMG Resources’ Bullabulling project in Western Australia’s East Yilgarn lithium corridor has sent ASX market tongues wagging after it tapped into an intriguing swarm of potentially lithium-rich pegmatites.
The news saw shares in the junior explorer spike nearly 85 per cent to an intraday high of 2.4 cents. The rush marked the company’s highest-ever daily trading volume.
BMG plunged 20 holes for a total of 1485m to test a series of pegmatites etched out from mapping, rubidium in-soil anomalism and historic rock-chip sampling that returned grades of more than 1 per cent lithium oxide, peaking at 1.9 per cent.
Management says drilling has confirmed pegmatites in several holes with 28 metres of pegmatite intersected at its Ubini prospect and multiple pegmatite intercepts pulled up at its Purple Panda prospect.
Earlier this year, the company entered into a binding option agreement with private entity Fairplay Gold to acquire 100 per cent of the Bullabulling project. Under the key terms of the agreement, BMG made a down payment of $40,000, buying it four months to pore over the accompanying datasets and to get boots on ground to evaluate the tenure.
With a June deadline looming, BMG can finalise the acquisition with a further cash payment of $200,000, along with 15 million fully-paid ordinary shares.
The tenure is a stone’s throw from Norton Gold Fields’ 3.1-million-ounce Bullabulling gold deposit and is nestled among a plethora of developing lithium projects, including Mineral Resources’ Mt Marion mine and Liatam Mining’s Bald Hill lithium mine.
Mineral Resources is looking to churn out 900,000 tonnes of mixed grade spodumene concentrate from its Mt Marion mine, which boasts a world-class mineral resource of 71.3 million tonnes grading 1.37 per cent lithium oxide.
BMG Resources’ managing director Bruce McCracken says: “BMG’s first drilling program at the Bullabulling Project has shown early potential for gold and lithium discovery, with the Ubini and Purple Panda prospects emerging as early targets.”
With samples fast-tracked to the laboratory for analysis, BMG is eagerly-awaiting the final assay results it hopes will reveal a large-scale, spodumene-rich pegmatite swarm.
The company also plunged two holes into its Poolmans prospect, chasing the source of gold from historic workings. Management says a quartz vein about 1.25m wide was pulled from the interpreted lode position from 53m. Assay results are due in the coming weeks.
BMG is a seasoned gold explorer, recently boosting the resource at its Abercromby gold project near Wiluna to 518,000 ounces from an 11.1-million-tonne haul averaging 1.45 grams per tonne.
The company says mineralisation at its Capital gold deposit starts at surface and continues along strike outside the resource footprint, adding considerable open-pit and higher-grade underground mining potential. The project is on granted mining leases, which BMG says provides an expedited pathway to mining approvals.
While gold prices have remained steady, hovering around the US$2000 (AU$3031) per ounce mark, lithium prices have taken a fair battering of late, slumping 70 per cent from last year’s astronomical highs, on the back of oversupply and the end to generous Chinese electric vehicle subsidies.
However, collective murmurings from industry commentators are pooling into a gentle roar, marking a likely turning point in the lithium market, with falling midstream inventories and a slowing of supply growth boding well for future prices.
BMG already has one advanced gold project on its books at Abercromby. With some early encouraging results from its first foray with the drill bit at Bullabilling, the company looks to be sharpening its pencil to execute the binding agreement to acquire a prospective patch among a smorgasbord of significant gold and lithium deposits.
With strong movement in the company’s share price, investors have given BMG a clear “thumbs up”.
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