Reopening
The Bullabulling Mine
GGG Resources PLC
The Bullabulling Gold Project
Location
Straddling the Great Eastern Highway, Bullabulling lies 70km south west of Kalgoorlie in Western Australia. It is a sizeable project area - 131km² – held in a series of granted mining leases, prospecting licences and exploration licences.
The site is well served by roads, power and water.
Bullabulling is part of the Eastern Goldfields. The Eastern Goldfields contain over 160 deposits, 19 of which are greater than three million ounces of gold. We know we are searching in a proven gold district.
Project History
Bullabulling, originally held by Samantha (Resolute Mining) and latterly by Jervois Mining, has a significant drill hole database with over 12,000 drill holes completed.
However, most of the drill holes only averaged 34m in length; therefore the deposit has not been tested at depth and remains open along strike.
Following extensive computer modelling of previously collected data, we believe that there could be large, open pittable, gold deposits, some at high grades, below 34m from the surface. We are testing this through new drilling programmes.
Technical historical data
The deposit was mined until 1998 from mainly from shallow lateritic and saprolitic ores. These ores, mined from six open pits, were generally less than 20m from the surface.
In 1998, Resolute Mining estimated a JORC-compliant Measured and Indicated Resource of 9.3Mt @ 1.44g/t Au (430,000oz of gold) by using a gold price assumption of A$600/oz.
In 1998, the Bullabulling Project consisted of:
| Resource Category | Tonnes | Grade g/t Au | Contained Gold oz. |
|---|---|---|---|
| Measured | 4,865,000 | 1.51 | 237,000 |
| Indicated | 4,159,000 | 1.35 | 180,800 |
| Inferred | 284,000 | 1.52 | 13,900 |
| TOTAL | 9,308,000 | 1.44 | 431,600 |
Current technical data
In August 2010, we announced an updated JORC Mineral Resource at Bullabulling of nearly 2m ounces of gold (41.5 Mt @ 1.5 g/t Au at 0.7 g/t Au cut off), an increase of approximately 450%, which was twice as much as we initially expected.
We have now (as at 15 August 2011) announced a further updated JORC at Bullabulling. The new resource estimate, from Phase One drilling alone, is 2.6m ounces of gold at 1.03 g/t, with a cut off of 0.5 g/t. This has enabled us to convert 711,700 ounces of gold from an Inferred to an Indicated Resource.
Table 1. The Bullabulling Mineral Resource (August 2011) at 0.5 g/t cut off (JORC 2004)
| Mineralisation Type | Cut Off (g/t Au) |
Class | Tonnes (Mt) | Gold grade g/t |
Contained Ounces |
|---|---|---|---|---|---|
| Bullabulling Laterite | 0.5 | Inferred | 1.6 | 0.89 | 45,700 |
| Bullabulling Fresh | 0.5 | Indicated | 21.3 | 1.01 | 691,000 |
| 0.5 | Inferred | 50.9 | 1.03 | 1,683,900 | |
| Bullabulling Trend Total | 73.8 | 1.02 | 2,420,600 | ||
| Gibraltar | 0.5 | Inferred | 4.5 | 1.12 | 161,900 |
| Laterite Dumps | 0.5 | Indicated | 0.5 | 1.2 | 20,700 |
| Grand Total | 78.8 | 1.03 | 2,603,100 |
Note: The resource is quoted for blocks with a grade of greater than 0.5 g/t and the tonnage figures for the fresh mineralisation have been discounted by 7% to allow for the impact of barren pegmatite dykes.
This new data continues to demonstrate that Bullabulling is a very large and highly continuous system, which we believe is capable of achieving an initial reserve of over 1m ounces of gold.
Currently, under Phase Two confirmation drilling, a further 70,000 metres of drilling is underway which we expect will allow us to upgrade a substantial portion of the 1.9m Inferred Resource to Indicated status in Q1 2012. This will enable us to establish an estimated initial ore reserve, which is currently expected to be around 1m ounces of gold.
Based in the well-established gold mining district of Koolgardie in Western Australia, Bullabulling is conveniently close to established power, water and road infrastructure. This means we would be able to bring a new Bullabulling open pit mine into production far more quickly than if this were a greenfield project.
Joint venture terms
GGG Resources plc owns 8,000,000 ordinary shares of Auzex Resources Ltd and Auzex Resources Ltd owns 14,044,944 (7,022,472 post consolidation) ordinary shares in GGG Resources plc.
GGG Resources plc paid A$1.9m to Auzex to earn a 50% interest in the Bullabulling Property. In addition, we paid A$600,000 to replace of half the Environmental Bond.
There will be a royalty payment to Jervois of A$30 per ounce for the first 400,000 oz. of gold produced, reducing to A$20 per ounce thereafter.
The development of Bullabulling will be governed by a Joint Venture Agreement between the GGG Resources and Auzex. Feasibility and development expenditure for Bullabulling will be jointly funded on presentation of a budget. If either party should elect not to contribute, then they will be diluted on a straight line basis, using an initial valuation of A$5 million.
The majority owner of Bullabulling will manage the joint venture. In the event of 50:50 ownership and no clear majority, a Joint Venture Management Committee will be set up with two representatives from each party to oversee operational management.
Please see Phase Two
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