BMG Resources has received commitments to raise $1.5 million through a share placement to sophisticated and institutional investors which will fully fund its extensional drilling program at its Abercromby gold project near Wiluna, WA.
The placement will comprise 150 million new fully paid shares at $0.01 cents per share in two Tranches with the new shares ranking equally with BMG’s existing shares on issue.
Tranche 1 will comprise 74 million ordinary in two parcels of 61 million and 13 million shares under ASX Rules 7 and 7.1 relating to placement capacity, while Tranche 2 will comprise the further issue of 76 million shares, subject to shareholder approval.
The funds will be used to progress development studies and undertake resource expansion drilling at the project which sits in the highly-prospective Kalgoorlie-Wiluna greenstone belt.
The locality includes numerous other gold and base metals operations within a radius of about 150km from Abercromby - some of which lie in other nearby greenstone belts.
BMG currently basks in the light of Abercromby’s considerable JORC-compliant maiden mineral resource of 11.12 million tonnes at a grade of 1.45g/t gold for 518,000 ounces of gold. The resource remains open to depth and along strike.
That Abercromby resource includes 354,000 inferred and indicated ounces of gold at a grade of 1.17g/t gold from surface - modelled at a cut-off grade of 0.4g/t gold.
The company has laid out plans to mine at least part of that via a small open-pit in a strategy towards early production. That small pit would then provide access via an underground portal to the high-grade Abercromby underground gold resource.
The underground component of the resource includes an additional 164,000 ounces of inferred and indicated gold at 3.09g/t gold at a cut-off grade of 1.25g/t gold, sitting between 200m and 500m below surface.
BMG Resources’ non-executive chairman John Prineas said: “The record gold price is a terrific background for BMG to launch an expansion drill programme at Abercromby where our maiden resource is just the beginning of the gold opportunity. With mineralisation that is open and many outstanding thick intercepts of high-grade gold which have yet to be followed-up, there is excellent potential for further drilling to significantly increase the resource. BMG will also continue to advance feasibility study work at Abercromby so we can confirm the viability for a potential gold mining operation to monetise the growing resource. We thank investors for recognising the strong value upside at Abercromby, and we look forward to updating investors on project developments as they occur.”
Metallurgical test work on Abercromby core samples has confirmed the free milling nature of the gold mineralisation which means the ore will be amenable to conventional carbon-in-leach (CIL) processing, with high gold recoveries achieved in testwork from composite samples ranging between 93 per cent and 94.94 per cent, with low tails-gold.
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By Doug Bright
