Gday sevie and apologies for the legth of the reply:
"BOLNISI GOLD NL 2002-07-30 ASX-SIGNAL-G
HOMEX - Sydney
+++++++++++++++++++++++++ QUARTERLY HIGHLIGHTS
1. QUARTZITE PROJECT
* Quarterly gold production continues to increase up to 24,472 ounces.
* Cash operating costs reduced to US$150 per ounce for the quarter.
* Heap leach quarterly stacked tonnage was 470,262 tonnes at 2.29 g/t Au head grade.
* US$1.5 million cash flow surplus repatriated to the Company in Australia.
OCAMPO PROJECT
* Feasibility study program commenced and on schedule.
* Ocampo Project drilling commenced for resource confirmation and metallurgical samples.
* Positive initial assay results from resource confirmation drillholes.
* Excellent preliminary metallurgical recoveries of approximately 95% Au and 83% Ag.
ROSEBY PROJECT
* Roseby Project drilling commenced for resource confirmation and metallurgical samples.
* Positive preliminary drilling results received for the Roseby Project.
* Positive preliminary metallurgical testwork results received for the Roseby Project.
2. GEORGIAN OPERATIONS
Bolnisi Gold NL ("the Company") has been active in the Bolnisi Region of Georgia since 1993 through its subsidiaries Quartzite Ltd which has been producing gold since April 1997, and Trans Georgian Resources Ltd which holds an exploration licence in southern Georgia containing occurrences of volcanically hosted gold and massive sulphide mineralisation.
Since April 1997, Quartzite has been recovering gold and silver by heap leach methods from an indicated resource of 12,000,000 tonnes of auriferous siliceous ore averaging 1A g/t Au, stockpiled at the Madneuli Mine near Kazreti in the former Soviet Republic of Georgia.
Quartzite Project gold production and heap leach performance continued to improve during the June 2002 quarter. Gold production increased to 24,472 ounces at a cash cost of US$150 per ounce.
Gold dore produced by the Quartzite Project continues to be shipped to Johnson Matthey in the United Kingdom for refining and sale. Surplus funds generated by the Quartzite Project are distributed to the partners in the project. During the June 2002 quarter, US$1,500,000 was distributed to the Company and the funds were repatriated to Australia.
QUARTZITE PROJECT PRODUCTION INFORMATION
A summary of the Quartzite Project production to 30 June 2002 is as follows:
QUARTER PROJECT TO DATE 1 APRIL 2002 1 MAY 1997 TO TO 30 JUNE 2002 30 JUNE 2002
The following points should be noted in relation to the above Quartzite Project production summary:
* Gold produced during the June quarter represents an 11% increase on the previous quarter's production.
* The cash operating cost per ounce for the June quarter has been maintained at a low US$150 per ounce.
* Gold recoveries during the June quarter were approximately 94% of the gold loaded onto the heaps, reflecting a near equilibrium status of the heaps during the quarter.
* Ore on the heap leach pad is estimated to contain a total of approximately 83,000 ounces of gold which will be recovered by the heap leach process with minimal additional operating costs.
As reflected in the graph of historic Quartzite Project production information below, gold production levels and cash operating costs per ounce of gold produced have been stabilised at the current highly profitable levels.
2.2 TRANS GEORGIAN RESOURCES LTD ('TGR') GOLD AND BASE METALS PROJECTS (BOLNISI 50%)
April 2002 was the third anniversary of the 5 year renewal of Licence 9, the 'exploration licence', and further reduction in area was both required under the terms of the licence and planned by the Company.
TGR has retained a total of 48.65 sq. km of the area renewed in April 1999 in two areas. Firstly, 47 sq. km in the Sakdrisi-Darbazi area NW of Madneuli/Kazreti protecting areas of known potential 'quartzite' gold and copper mineralisation, and secondly, 1.65 sq. km adjoining the eastern margin of the Madneuli mine lease covering a possible extension of the Eastern Quartzite body which outcrops within the Madneuli pit. Both these areas are seen as potential future sources of ore to supply the Quartzite and Madneuli operations.
Licence 10, the original 'advanced' properties licence, reached the end of its geological exploration term in April 2002 and entered its 'development' phase. Of the original 5 properties, Sakdrisi, Dambludka, Tsiteli Sopeli, Kvemo Bolnisi, and David Garedji, only Sakdrisi was deemed to be of sufficient potential to be considered for further evaluation. Sakdrisi hosts both gold bearing secondary quartzite mineralisation and, at depth, copper sulphides which may have potential as future sources of ore to both the Quartzite and Madneuli operations.
The retained Sakdrisi property of Licence 10 lies within the retained portion of the exploration licence.
The Ocampo Project, located in the Sierra Madre Occidental metallogenic province, Chihuahua, Mexico covers 3,499 hectares. The Company has the right to earn a 60% interest in a defined area within the Ocampo Project and the gold and silver resources contained therein. The area of interest covered by the Company's agreement contains the majority of the already defined existing open pittable oxide resources and, in the Company's opinion, the majority of any potential for further upside.
3.1 DRILLING PROGRAM
At Ocampo, gold/silver mineralisation is of the intrusion-related low sulphidation epithermal style with ore deposition controlled in structural settings locally referred to as clavos (ore shoots).
The objective of the current drill program, as part of the Ocampo Project feasibility study, is to develop the resource model to Australian JORC standards enabling ore reserves to be determined, pit outlines defined and mining schedules detailed thus facilitating completion of feasibility and subsequent development. In parallel, this program has provided core samples for metallurgical, geotechnical, geological and environmental purposes.
A total of 4,486 metres of diamond core and reverse circulation (RC) drilling has been completed on the Ocampo Project over the last quarter. This included the drilling of twelve 61.5mm diameter HQ core holes for sample for metallurgical testwork, along with 29 RC drillholes designed to infill and extend the existing drill pattern at Plaza de Gallos, Refugio and the eastern end of Conico. Assay results are awaited on drillhole ODH-268 to ODH-279. When these assays are to hand, the resource model will be updated (a continuing process) and the next phase of drilling will proceed. This is estimated to entail a further 4,400 metres of RC drilling in 25 holes to complete Plaza de Gallos and Refugio, and 3,500 metres at Picacho.
Progress during this current program has been made in increasing understanding of ore controls. It is now considered that dip continuity of ore shoots is not as important as the plunge control of those shoots and alteration control is also better understood. On the upside, grade and continuity is holding up down plunge.
Overall, pending further assays and resource modelling, the measured category of resources appears to have been increased and there is better continuity and control over early mining resources in Plaza de Gallos and Refugio.
METALLURGICAL DRILLING
The 12 metallurgical drillholes twinned existing holes which were considered representative of the mineralisation. Four holes were collared at both Plaza de Gallos and Refugio and two each at Picacho and Conico. Drillholes ODH-242 and 243 were terminated in old workings not intersected in the original holes ODH-79 and 72. Drillholes ODH-252 and 253 were both drilled as twins of ODH-1. This core has been shipped to an Australian metallurgical laboratory for carbon in leach testwork, crushing, grinding, compressive strength tests, and general process testwork which will assist in determining the optimum process route for Ocampo ore.
RESOURCE/RESERVE DRILLING
PLAZA DE GALLOS
At Plaza de Gallos, drilling resulted in the following significant results:
DRILLHOLE AREA FROM TO INTERCEPT Au g/t Ag g/t (m)
Infill drilling was completed on the two western sections of Plaza de Gallos. Assay results are awaited but a preliminary geological interpretation suggests that the drilling has tracked the north-west plunge of the Plaza de Gallos mineralisation in between previous drill intercepts on these sections.
REFUGIO
At Refugio, drillholes ODH-240, 245, 263, 264, 265 and 272 were drilled to test the up-dip continuity of the mineralisation and to ensure adequate control on grade interpolation in the near surface zone. Drill results are encouraging with quartz breccia and stockworking being intersected in all holes along with some significant mineralised intercepts as follows:
DRILLHOLE AREA FROM TO INTERCEPT Au g/t Ag g/t (m)
Gravity leach tests were performed on RC chip composite samples from the earlier drilling campaign at Refugio (drillholes ODH-091 and 118). Agitated leach tests at a grind size of 80% passing 75 microns were completed with and without gravity separation prior to leaching. The samples leached very well with about 95% of the gold extracted after 24 hours of leaching with and without the gravity step. The latter improved the silver leaching rate and therefore the silver extraction after 24 hours by an average of approximately 6% for the two composites tested giving an average silver recovery of about 83%.
This test work was repeated at a grind size of 80% passing 53 microns. For the lower grade composite (ODH118) there is a slight improvement in both gold and silver recoveries indicated by grinding to a p80 = 53 microns compared with a p80 = 75 microns for a leaching time of 24 and 48 hours. This equates to about US$0.08 per tonne but additional power costs for the finer grind is about 3 times this value.
There was a slight improvement in the gold recovery for the higher grade composite (ODH091) after 24 hours of leaching but not enough to cover the additional power cost of the finer grind. Silver recovery after 24 hours was actually lower at the finer grind size. After 48 hours of leaching, the additional gold and silver recovery at the p80 = 53 microns is more significant at about US$0.43 per tonne.
Broadly speaking based on these two composite samples there appears to be no advantage in going to the finer grind. Further tests are in progress, the bulk of it on the new core samples drilled this quarter. This work will assist in determining whether heap leach or conventional crush/grind, leaching and carbon recovery of gold and silver is the optimum process route for treatment of the Ocampo ore.
3.3 ENGINEERING
New aerial photography at a scale of 1:10000 was flown at the end of the dry season in mid-June. This photography will enable detailed 1 metre contour topographic plans to be produced to assist in project design and construction. Photogrammetry will be commenced shortly. This photography also has geological applications.
Investigations into availability of good quality used processing equipment in North America are ongoing.
3.4 FUTURE WORK
As noted above, on completion of the review of the results of the drilling completed to date, the Ocampo Project resource model will be updated and a further 4,400 metres of RC drilling will be undertaken at Plaza de Gallos and Refugio and 3,500 metres at Picacho. This program is intended to enable mine scheduling and pit outlines to be determined for feasibility and development purposes.
Metallurgical testwork, engineering design work and environmental studies will be progressed in anticipation of the commencement of plant construction.
4. ROSEBY JOINT VENTURE COPPER PROJECT (BOLNISI 50% EARNING UP TO 70%)
Roseby is a significant oxide copper resource north of Cloncurry in the Mt Isa-Cloncurry field in NW Queensland covered by two joint ventures, the Feasibility and Exploration Joint Ventures. The Company holds a 50% interest in two joint ventures and has the right to increase its share of the Feasibility Joint Venture to 70%. A high proportion (up to 60%) of the copper occurs as fine-grained native copper, which may be recoverable by relatively simple and inexpensive gravity separation methods.
4.1 METALLURGY
During the quarter ended 30 June 2002, preliminary metallurgical testwork was carried out on core samples which were available from a drilling program conducted some 10 years ago, to test the Company's belief that the Roseby Project copper may be recoverable by simple and inexpensive gravity separation methods.
The highly encouraging results of this testwork were reported in detail by the Company on 5 June 2002 and are summarised below.
Approximately 50% of the contained copper was recovered by gravity recovery techniques into a 25% copper concentrate. Total recoveries after a flotation recovery process, which was adversely affected by the oxidation of the 10 year old metallurgical core sample, increased to in excess of 60% recovery into a 20% concentrate.
There is potential to increase the copper recovery, and to significantly improve the concentrate grade achieved by the preliminary metallurgical testwork. Gravity recovery of copper could be improved by reprocessing the initial gravity tailings and by regrinding and reprocessing of a gravity middlings product. The gravity concentrate grade could be improved, if necessary, by regrinding and reprocessing in a cleaner stage. Flotation recoveries are likely to be increased following reagent optimisation and by conducting cleaner stages of flotation. Flotation recoveries are also likely to increase when ore, which has not been subjected to several years of oxidation, is processed.
4.2 DRILLING
A drilling program, with the principal aims of verifying ore grade and thickness reported from programs conducted by previous tenement holders and to provide sample material for a comprehensive metallurgical testwork program, was commenced in mid June completed in late July 2002.
A total of 1,084 metres of HQ3 core drilling in 8 holes and 851 metres RC drilling in 6 holes was completed at the Blackard and Scanlan deposits. Most of the drilling was at the Blackard deposit.
Results for the first four holes have been received. Significant amounts of generally fine grained native copper were intersected in most holes. Results to date are highly encouraging and, using a 0.5% Cu cut-off, are summarised as follows:
HOLE DEPOSIT CO-ORDINATES DIP FROM TO INTER- GRADE A NO VAL % Cu EAST NORTH DEG (m) (m) (m)
Further metallurgical testwork is scheduled to be conducted on samples to be collected from the current drilling program to facilitate a plant flowsheet design and feasibility study. In conjunction with this work, further resource definition drilling is planned together with the collection of environmental data for the completion of environmental studies.
Both BSG and BSGOA are worth consideration at these prices, but do your own research.
Cheers, Nick
BSG Price at posting:
0.0¢ Sentiment: None Disclosure: Held
