Document 3-203692-E dated 30-Apr-2003 Third Quarter Activities Report
Part A (entered 10:25 am) BALLARAT GOLDFIELDS NL 2003-04-30 ASX-SIGNAL-G
HOMEX - Melbourne
+++++++++++++++++++++++++ REPORT FOR THE QUARTER ENDED 31ST MARCH 2003
SIGNIFICANT HIGHLIGHTS
* Substantial new Gold Potential identified at Ballarat.
* Completion of the first stage of the geological model over a 3.5 x 3.5km square area from Ballarat East to West, has identified additional prospective targets close to the old Ballarat East field.
* Successful completion of a 584m exploration trench between East and West Ballarat has identified the presence of a major anticline (the Yarrowee Creek line). This considerably upgrades the prospectivity in an area previously thought to be barren. Located under alluvial sediments, the Yarrowee line would have been masked from surface prospecting. To date there has been no drill exploration along the Yarrowee Creek line or any evidence of historical workings.
* An external advisory panel, of geological and mining experts has been established to review and comment on our work plan and outcomes. This panel has met and begun its review of the geological model.
* The sale of small shareholdings has been successfully completed, reducing the company register from approximately 8,900 to 4,300 Shareholders. This will significantly reduce future shareholder administration costs.
* Successful completion of the sale of Highlake Resources. BGF will participate in a 1% royalty on any future production.
* Finalisation of sale of Oztrak. BGF will participate in up to 55% of any future recovery from legal proceedings still ongoing in Germany.
* All employees are now based at the mine site offices off Brittain Street, Ballarat.
MORE TO FOLLOW
Part B (entered 02-May-2003 02:42 pm) BALLARAT GOLDFIELDS NL 2003-04-30 ASX-SIGNAL-G
HOMEX - Melbourne
+++++++++++++++++++++++++ EXPLORATION
SUMMARY
During the quarter, the Company's new geological team continued the work program previously set down. The resulting geological model has significant new features which will enable us to complete the Ballarat field re-targeting. Additional work included the digital reconstruction of stopes at the Llanberris, First Chance and Last Chance mines, which represents 600m of the 3.5km strike length of the Ballarat East field. In summary, the program has provided BGF with the following:
1. The recognition of a further anticline between East and West (fig 1). The importance of this is due to the well recognised relationship between gold bearing structures and the steeply dipping eastern limbs of regional anticlines. This significantly upgrades the exploration potential in an area which has not undergone any previous exploration. At least 4 significant leather jacket faults which were identified in the trench, project into the new anticline on the Yarrowee Creek Line.
2. The newly identified cyclic periodicity of the rock packages explains why an area immediately west of the Ballarat East field (fig 2 & 4), previously interpreted as the favourable eastern limb of the anticline, is in reality a minor fold in the western limb of the anticline. This region had confounded geologists and failed to deliver material economic value.
3. In addition the model now validates a new interpretation the Sulieman Line (first postulated by A.W Strange, 1970's) highlighting an area of outstanding geological potential for new gold mineralisation targets within 300m of the old Ballarat East mines. (fig 1, 2, & 3)
4. Routine assaying of the trench, (60% of sample assays completed to date) has shown gold is present; with the most significant assay values ranging from 1.03 - 2.77 g/t.
GEOLOGICAL TRENCH
Background
At the early stages of reviewing the regional geology over BGF's Ballarat Licenses, it was recognised that there was insufficient data to make a comprehensive geological interpretation between the historically mined fields of Ballarat East and Ballarat West. Most of the previous interpretations (fig. 4) identified the presence of a large anticline between the two fields, which had significant negative implications in regard to the likely potential of the whole field and where drilling should initially be focused. To resolve this issue, a 584m trench, augmented with outcrop mapping was dug to uncover the folding pattern and any west dipping faults (the hosts of the leatherjacket style of ore body). The resulting spatial data has enabled much greater detailed interpretation concerning the size and location of the geological potential within BGF's Ballarat licenses.
RESULTS
The results from the geological mapping of the trench were combined with mapping of an adjacent road cutting, to produce a cross-section totalling 834m, of the 1.6km section between Ballarat East and Ballarat West. The mapped data effectively changes all previous interpretations, with an apparent regular cyclicity to the fold pattern identified, enabling the interpretation between Ballarat East and Ballarat West to be completed. The resulting interpretation is shown in figures 2 & 5. The relative position of the interpretation shown in figure one is represented by a black line which extends above the present day topography.
The trench occupies a section of ground where the shallow gravels and Ordovician sediments were prospected at the early stages of Ballarat's mining history. Only very low levels of gold production were ever recorded from this area. Mapping from the trench revealed a large westerly dipping sequence of sandstones, siltstones and shales, with some minor folding, and the presence of four large west dipping faults. The westerly dipping sequence identifies that immediately to the west of the Ballarat East field is a major fold. This observation is of significance as most of the mineralisation throughout Ballarat has been dominated by the intersection of large west dipping faults and easterly dipping sediments. This result helps explain why much of the area has not returned significant gold production historically.
Within the last 50m of the trench, the sediments changed from west dipping to east dipping. The presence of a west dipping fault at this location was associated with a 2m wide quartz vein, and up to 3m of the surrounding host rock contained weathered pyrite. The presence of pyrite is considered important as alteration of this type is very prominent around the high grade intersections from drill core at Ballarat East.
The trench could not continue any further, as the remaining Ordovician aged sediments are covered by recent alluvial sediments to a depth of greater than 10m (possibly up to 50m), before reaching the basalt covered plateau of the Ballarat West field. From the additional factual information from Ballarat East and Ballarat West, a pattern of major fold axis changing the dip of the sediments every 500 to 600m is apparent. This interpretation is shown in figures 2 & 5.
A key feature about the interpretation is the location of the favourable geology for the formation of significant quartz hosted gold deposits. The historical research has shown that up to 60% of the ounces produced from Ballarat East (table 1) came from the west dipping faults, which pass through an east dipping sedimentary package (known as a leatherjacket style of orebody). The areas where this dominantly occurs are shown in red on figure 5. Some of the leatherjacket styles of orebodies, at Ballarat West, were not mined as their grade at significant depths were reportedly not high enough to sustain production at the time. Essentially, it has been identified at Ballarat West that a number of shallow leatherjacket style orebodies were mined and some leatherjacket style quartz veins were identified but not mined at depth at Ballarat West. These orebody types in Ballarat East are found to have an average recovered grade of 9.3g/t, and are generally large in character, typically ranging from 3m to 40m in thickness. They are considered to be amenable to modern mining techniques and make up the majority of the exploration potential throughout the Ballarat field.
This interpretation of an easterly dipping section of sediments underneath shallow alluvial cover between Ballarat East and Ballarat West is very significant as it identifies an area of potential within favourable geology, which has not been explored, either historically or in more recent times.
The geology identified in this cross-section has now been extrapolated in 3D across the field to produce a complete 3D geological model. Key target locations, along with their potential sizes are being identified during this process. This geological interpretation and resulting exploration potential will undergo external review by our advisory panel. Following this we anticipate releasing a summary of the field potential for Gold Mineralisation in early May.
MODEL CONSTRUCTION
Additional modelling includes the reconstruction of stopes at the Llanberris, First Chance and Last Chance mines, which represents 600m of the 3.5km strike length of the Ballarat East field. These stope shapes provide an important view of the orebody sizes that exist at Ballarat, and will form part of a scoping study which aims to identify the likely cost of mining these orebodies using current mining methods.
Historical production records were reviewed in detail to produce a breakdown, where possible, of the historical production from each orebody type. This work was undertaken to enable a better estimate of the likely size of each orebody type and also identify which orebody types are the most significant for BGF to explore for. This work is summarized in table 1 below.
Total underground production Ballarat East* 1,304,247 Production not allocated 538,851
TABLE 1. Breakdown of production by orebody type for the Ballarat East field. *For the purposes of this study, the Ballarat East field is taken to be a 3.5km strike length where the larger mining companies operated. This extends from the Woah Hawp Canton mine in the south to the Victoria United mine in the north. (Excluding alluvial production).
Orebody Type Descriptions:
Leatherjacket - Quartz hosted gold deposits, associated with westerly dipping (typically 40 to 50 degrees), north-south striking faults.
Vertical lode - Near vertically oriented quartz hosted gold deposits that are sub parallel to the sedimentary rocks. They are typically bound by westerly dipping faults at the top and bottom.
Favourable beds - Ore mined along a particular narrow slate bed. Quartz bodies along these horizons could be of various orientations. Historically, the most important favourable bed was named the Indicator Bed.
Fold related - Ore mined at the apex of an anticline or syncline (where the sediments have folded and changed their orientation).
CORPORATE
This quarter saw finalisation on a number of initiatives committed to in the 2002 prospectus. Work is proceeding to plan and is on budget. The following achievements for the March Quarter include:
* BGF has finalised the relocation of its corporate office to the mine site.
* Successful finalisation of the sale of technology subsidiary Oztrak. Importantly, the terms of the sale entitles BGF to 55% (less costs up to 15%) of the proceeds recovered from the substantial claim against BSK GmbH Germany.
* Successful sale of the Highlake tenements. The sale removed exploration funding commitments of approximately $680,000 per annum, and enables BGF to focus on its core gold tenements around the Ballarat gold fields. The sale entitles BGF to receive a 1% royalty of gold recovered from the tenements at no future cost to BGF. As a result BGF has written down the carrying value of its tenements by approximately $3.7 million.
* The sale of small shareholdings has been successfully completed, reducing the company register from 8,900 to 4,300 Shareholders. This will halve future administration costs.
The stock was sold at market through Bell Potter Securities, returning a net average price to shareholders of 3.716 cents. The average holding of these shareholders was $69, thus enabling them to recover their funds at no brokerage cost.
A total of 2,152 shareholders with unmarketable parcels elected to retain their shareholding in BGF.
BGF is now solely concentrated on its Ballarat and Berringa gold licenses. Cash at the end of the quarter was $1.6 million.
BGF Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
