BMG ups Wiluna value with 518,000-ounce gold resource

BMG Resources has delivered an impressive 518,000-ounce maiden gold resource from an 11.1-million-tonne haul at 1.45 grams per tonne gold at its Abercromby gold project near Wiluna.

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.

Management says its discovery cost was just $8.35 per ounce of gold.

BMG’s maiden JORC mineral resource is comprised of an open-pit zone with 354,000 ounces of gold at 1.17 g/t between surface and 200m depth, with a 0.4 g/t gold grade cut-off. The potential underground mining zone chipped in with a resource of 164,000 ounces of gold with a head grade of 3.09 g/t between 200m and 500m below surface using a cut-off of 1.5 g/t gold.

The total resource has 68 per cent in the inferred category, or 353,000 ounces of gold, and 32 per cent in the indicated category, or 165,000 ounces of gold. Gold mineralisation in oxide and transitional material accounts for 173,000 ounces of the resource and 345,000 ounces of the gold is in fresh or unweathered unoxidized rock.

BMG’s maiden resource has a higher-grade component of 430,000 ounces of gold from ore with a head grade of 2.01 g/t at a 1 g/t gold cut-off.

Metallurgical testing has confirmed the Capital gold deposit is free-milling across all zones and BMG says that is a strong indication of the potential for a straightforward open-pit mining operation. The company concludes that the deposit is amenable to conventional carbon-in-leach processing with high gold recoveries.

BMG is kicking off development studies for its Abercromby gold project, while continuing what it calls high-impact expansion drilling to convert inferred resources to the indicated category. Drilling will also test large gold anomalies and strike extensions for several kilometres to the south of the Capital deposit and the company believes it could deliver similar discoveries.

BMG Resources managing director Bruce McCracken said: “BMG has shifted from pure explorer to potential developer with a large resource base and huge potential for further growth. Abercromby now has a metric for valuation that BMG can use to quantitatively demonstrate to the market its success in leveraging value from the drill bit.”

The company says Abercromby is well located for development and believes it has the potential to monetise its project in a rapidly-appreciating gold price environment. It says the maiden gold resource at Capital put it in an enviable position to pursue long-term, sustained shareholder value.

BMG’s wholly-owned Abercromby gold project is in the Wiluna Greenstone Belt, which has historic gold production of more than 40 million ounces. The geology is favourable for gold mining, with drilling having intersected multiple thick intervals of high-grade gold. The company says that confirms a large gold system.

The Capital gold deposit sits in the northern third of the 12 square kilometres of the Abercromby mining leases. Further successful drilling could propel this project and with shares up nearly 67 per cent at one point during intraday trading, the punters clearly think so, too. 

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au