possible new project very soon

Tuesday, December 04, 2007


TROUBLED miner BMA Gold has re-listed on the Australian Securities Exchange after a horror year, but the company's managing director Mark Wheatley is predicting better times ahead.



Core from BMA Gold's Twin Hill project

BMA began the year on a low when it downgraded its reserves at the Twin Hills gold project in central Queensland in January.

The company re-assessed its Area 2 resource significantly downwards, with resources falling from 277,000 tonnes at 21.6 grams per tonne for 193,000 ounces contained gold to 214,000t at 10.9gpt gold for 75,000oz contained gold.

At the time, BMA said the downgrade in resources and reserves was a result of a "significant reinterpretation of ore geology".

The company's share price also took a battering, dropping from 16c down to 4c. BMA then went into administration over debts of $2.2 million owed to the Commonwealth Bank of Australia, and its shares were suspended from the ASX.

Mining ceased at Twin Hills in March and the mill closed in April, and sales of mine and mill equipment raised some $7.4 million.

The company came out of administration in August, and its subsidiary, Twin Hills operations, also came out of administration on November 29.

The company's debts were paid in full from the sale and after BMA raised some $5.5 million in a rights issue underwritten by Hartleys.

The company paid off secured and unsecured debt of around $10 million.

The junior now plans to spend $1 million of the remaining cash on exploration at Twin Hills, and the remainder on acquiring new projects.

"It's been a very, very tough year," BMA's managing director Mark Wheatley told MiningNews.net.

In the wake of the Twin Hills downgrade, the board lost two members, retaining only Wheatley and Michael O'Keefe, chairman of Riversdale Mining and former managing director of Glencore Australia.

Ken Winters, who has a background at Highlands Pacific and CBH Resources, also stayed with the company's executive.

Wheatley, who also sits on the board of successful Canadian uranium play Uranium One, said the decision to keep going with BMA was not about financial reward but was instead a matter of reputation.

"I've had a very good career up until this and there was no way I was going to let [the company go under] – Michael was the same. We're now not involved in a failure.

"I've visited maybe 12 or 13 brokers and they respect the fact that we've hung in there, we've paid everyone, and now we're starting again," Wheatley said.

The company has repaid its debts to its creditors and on re-listing, its share price has risen from 2.9c to 3.5c, a gain of over 20%.

"Normally, when a company goes into administration, normally the creditors don't get paid much and the shareholders get nothing," Wheatley said.

"In our case, because we didn't have a lot of debt and we closed the mine quickly, we were able to use our assets and hang in there.

"To be back trading is just wonderful. Our administrator said it's never been done before, where all creditors got 100 cents in the dollar and shareholders have retained value. It's only small, but we're pretty proud of it."

Wheatley said he could understand that shareholders may be wary of the re-listed company after its difficult year, but he also said he believed BMA's strengths outweighed its history and the company's executive team needed to be evaluated for their skills in building value and growing companies.

"If [shareholders] have a good hard look at it and who's left in the company, it's a new board … and if people look at what I've done and what Michael has done, there's a track record of creating value.

"The people who are here now are committed to it, and have done a lot of successful [mergers and acquisitions] off a very small base," he said.

"Michael has taken Riversdale from $3 million dollars to $1.4 billion … so both of us, and Ken, we're keen to build this opportunity.

"There's a real dearth in mid-cap gold producers, and we want to go from where we are with M&A and become a mid-cap Australian company, and we're hoping to do it within a couple of years."

Wheatley said the company's immediate focus was on exploration at the Twin Hills project between the two existing resources at Lone Sister and 309, and the company was targeting 200,000-500,000oz.

"The tenements are mature around the two resources at 309 and Lone Sister, but there has been very little drilling elsewhere, so we want to look in the corridor between the two," he said.

At Twin Hills, BMA has resources of 788,000 at 6.1gpt gold for 155,000oz from the 309 project, while the Lone Sister prospect has some 120,000pz gold from 1Mt at 3.7gpt.