ABM Resources (ASX: ABU) is on track to begin trial mining at its Old Pirate High Grade Gold Project in the Northern Territory and has found high grade gold at two new surface zones.
Heavy equipment is being mobilised to the Old Pirate site with site works set to commence next week. Construction of the Pilot Plant is also on schedule and budget with processing set to start in July 2013.
“We are on the verge of commencing our trial mining at Old Pirate,” managing director Darren Holden said.
“With heavy equipment being mobilised to site we remain on time and on budget. As we proceed into this important phase we are continuing our low-cost but effective surface testing of quartz veins.”
ABM had previously flagged that trial mining would be funded by its cash in hand, which stood at $10.8 million as of 31 March 2013, and could potentially be cost neutral from the sale of gold.
ABM is targeting around 3,000 ounces of gold during the 10,000 tonne trial mining period.
Trial mining, which includes the use of a scalable 15tph modular gravity gold plant, is the first stage of a multi-stage approach to development at Old Pirate.
New high grade gold zones
ABM’s ongoing exploration within trucking distance of the Old Pirate plant has yield more fruit with the discovery of high grade gold from surface rock sampling at the Bermuda South Area and trenching at the Bandit Trend.
This yielded peak results of 21.6 grams per tonne gold and 66.2g/t gold respectively.
“We are very pleased with yet another round of results with new high-grade gold bearing zones being discovered at surface illustrating the untapped potential of this extensive gold system,” Holden added.
Bermuda South Area is located about 400 metres south of the main Old Pirate High-Grade Gold Deposit and 200 metres south of the Bermuda Zone.
The prospect consists of high-grade gold identified in veins between 20c centimetres and 4 metres wide. Prior to this sampling, these veins were thought to be barren of gold.
Gold is identified from systematic rock samples revealing high grade gold over a strike length of about 30 metres and a zone of multiple veins about 15 metres wide.
Potential for the mineralisation to extend in both width and strike exists as only outcropping quartz has been sampled. Other notable results include 21g/t gold and 19.85g/t gold.
At the Bandit South Prospect, systematic trenching had returned results including the peak 66.2g/t as well as 62.9g/t gold, 18.85g/t gold and 13.45g/t gold.
This followed up on recent rock sampling that returned anomalous results with a peak value of 108g/t gold.
The trenching was carried out over multiple outcropping veins in a zone 6 metres by 4 metres that continues under shallow cover into the principal target area where geophysics indicates structural complexity (faults and folds).
The Bandit Trend (including the Bandit - Bandit South Area) consists of an area more than 4 kilometres long and 1.5 kilometres wide with widespread and outcropping quartz veins hosted in sedimentary shale and sandstone sequences.
Further discoveries might be on the cards as more than 1,000 other surface samples from multiple quartz veins are still pending assay.
The discovery of the Golden Hind deposit in 2012 had taught ABM’s exploration team that quartz veins in the area can change in nature and transition from low-grade to high-grade over very short distances.
Analysis
The imminent start-up of trial mining marks a milestone for ABM Resources, putting it on course towards full production and acting as a Feasibility Study for future open pit operations at the company’s Twin Bonanza Gold Camp.
This will mitigate risk and provide valuable feasibility information for the stage two development.
ABM’s further discovery of new high grade gold zones within trucking distance of Old Pirate plant offers further open pit potential that could extend both the resource and mine life at the project.
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