Blackham Resources inks resource at Bulletin South Matilda at 4.7M ozs

Blackham Resources (ASX:BLK) has defined a maiden open pit Resource estimate of 280000 ounces of gold for the Bulletin South deposit which could extend Matilda Project mine life beyond the initial 4 years.

Bulletin South is located less than 2 kilometres from the company’s wholly-owned WGP gold plant.

The open pit resource of 2.6 million tonnes at 3.4 grams per tonne gold increases total resources at the Matilda Project to 44Mt at 3.3g/t for 4.7 million ounces of gold.

This is all located within a 20 kilometre radius of the plant.

Matilda – located in the Northern Yilgarn Western Australia - could be restarted in late 2015 and the project could be cash flow positive within five months of the development decision.

Open pit mining studies are now underway for the Bulletin Happy Jack Squib and Golden Age North deposits with a view to extending the mine life.

“The Bulletin South/Happy Jack resources are looking like an additional source of shallow high grade mill feed to extend the Matilda Project’s mine plan beyond the initial 4 years mine life” managing director Bryan Dixon said.

“Whilst our mining team focuses on the open pit mining studies in this Bulletin/Happy Jack area we will also be revising the Matilda Mine resource to include additional drilling over the last 18 months.

“The next Matilda Mine drill program is currently in the final stages of planning and we expect to mobilise a RC rig to site in the coming week.”

In January Blackham raised $3 million to fund exploration and feasibility studies for the project.


Bulletin South

Blackham has recently completed a resource estimate targeting remnant mineralisation surrounding the Bulletin pit and continuing along the Happy Jack – Bulletin Fault Zone (BFZ).

Only resources below 400m had been reported previously.

The Bulletin open pit was mined to a depth of approximately 70 metres during the 1990’s producing 70000 ounces of gold by 1994 when the focus shifted to the high grade underground discovery underneath the pit.

A new resource based on remnant pillars and un-mined parallel lodes evident in the existing drill coverage has been finalised.

Work is continuing on a pit optimisation study over the 1.5 kilometre-long Bulletin - Happy Jack Trend.

Similar remnant mineralisation surrounding the Happy Jack open pit (360000 tonnes at 5.3g/t for 60000 ounces) is already within the resource inventory.

Mining studies will focus on the Bulletin South Happy Jack Squib and Golden Age North deposits with resources totalling 3.5Mt at 3.4g/t for 376000 ounces of gold.

The aim is to identify how much of the shallower resources along the 1.5 kilometre strike are amenable to open pit mining.

The open pit potential in this area has not been reviewed since mining ceased at Bulletin in 1994.

All of these deposits sit outside of Matilda Project’s initial Inventory of 5Mt at 2.8g/t for 454000 ounces of contained gold.

This represents another opportunity outside of the Matilda Mine Golden Age/Brothers/Republic Reefs and Williamson Mine extensions to grow the Projects mine life beyond the current 4 years.


Matilda Gold Project

The Matilda Gold Project consists a number of open pit and underground deposits within 20 kilometres of the company’s existing 1.3 million tonne per annum gold plant.

Under the first stage development Blackham seeks to unlock free milling production of 100000 ounces of gold per annum.

This offers low risk processing of free milling ores and low capital cost refurbishment of the processing plant that will be financed out of debt.

In January it defined and ranked over 70 exploration prospects with 8 drill-ready target areas.

This will build on the initial mineral inventory of 5 million tonnes at 2.8 grams per tonne or 454000 ounces of contained gold.


Analysis

The definition of an open pit resource at the Bulletin South deposit adds to the likelihood that Blackham Resources can extend the Matilda Project mine plan beyond the initial 4 years.

Further upgrades are likely as the company focuses on open pit mining studies in the Bulletin/Happy Jack area as well as revising the Matilda Mine resource to include additional drilling over the last 18 months.

Matilda could be restarted in late 2015 and the project could be cash flow positive within five months of the development decision.
 
Initial Capex is estimated at $24.6 million while all-in sustaining cash costs are A$1000 to A$1100 per ounce. Currently the price of gold is about A$1588 an ounce.

Proactive Investors Australia is the market leader in producing news articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia UK North America and Hong Kong / China.