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BMG Resources studies set to guide Capital development potential

Updated: Mar 21


A BMG Resources RC drill rig at the Abercromby project. Credit: File

BMG Resources has instigated scoping and development studies, in addition to resource definition, expansion and exploration drilling, to develop and expand the 518,000-ounce resource at its Capital deposit in Western Australia


The company also plans to test other gold anomalies south of Capital, which it believes have the potential to deliver more pre-PFS ounces to the project.


The Capital deposit comprises 11.12 million tonnes at 1.45 grams per tonne and lies within the company’s 100 per cent-held Abercromby project in the Agnew-Wiluna greenstone belt near the WA town of Wiluna. Management says that the 518,000 gold ounces is a subset of a global resource estimate of about 670,000 ounces, with no lower cut-off grade applied.


BMG’s reported maiden mineral resource estimate for Capital classified 32 per cent of the total in the indicated category and 68 per cent as inferred. About 33.4 per cent of the gold is in oxide and transitional rock, while 66.66 per cent is in fresh rock.


The company also says there are higher-grade components to the resource, including 4.6 million tonnes at 2.4g/t gold for 360,000 ounces at a cut-off grade of 1.2g/t.


Management has either started or commissioned several preliminary development studies, while also planning resource expansion drilling at Capital. It believes further testing of large regional gold anomalies to the south of Capital may have the potential to deliver further ounces to potentially assist a future prefeasibility study (PFS).


BMG has engaged independent consultants Intermine Engineering to assess mining options via open-pit and underground exploitation methods, while Rockwater Hydrogeological and Environmental consultants are compiling hydrological studies. MineGeoTech has been engaged to advise on geotechnical issues and previous work by Extreme Metallurgy and GR Engineering will provide metallurgical advice.


Environmental work being undertaken by Jane O’Neill Consulting is drawing on a large library of information from previous studies.

Abercromby is a highly prospective, underexplored gold project with a free-milling orebody that offers development optionality. A huge bonus is the location of Abercromby – on granted mining leases in an established mining region. Following the completion of the scoping work, BMG will undertake a strategic assessment to determine the best avenues to generate shareholder value from Abercromby. BMG Resources managing director Bruce McCracken

Mr McCracken said the company was also progressing a second lithium and gold drill program at its 100 per cent-owned Bullabulling project, with drill results expected in the coming weeks.


The Agnew-Wiluna greenstone belt is one of WA’s most significant gold-producing regions, with an endowment of more than 40 million ounces of gold – second only to Kalgoorlie in terms of historic global production. BMG holds 100 per cent of the gold and other mineral rights, excluding-uranium, on two granted mining leases.


Favourable factors in BMG’s push towards a PFS and mine development lie not only in its currently defined resource after three rounds of drilling, but in the fact that Capital is open-ended laterally and in depth. It also has the potential for infill and extension drilling to significantly enhance the existing asset, including by raising the categories of certain resource classes.


In addition, the overall gold endowment of the region implies a significant upside potential, with the likelihood of additional ounces being identified within Capital’s immediate sphere of influence.


More in-ground testwork, including infill drilling and resource and mine modelling work, will almost certainly be required to move the in situ resource categories to mineable ore categories before the final numbers come in. But it should ultimately lift grades.


BMG looks to be off to a good start with a coherent deposit, strong potential for open-pit mining and many other upside elements. With successful outcomes to the various studies already in train and some encouraging resource infill and extension work, it could soon be off to the races.


Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au

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