ABM Resources picks up the pace, trial mining at Old Pirate gold project
ABM Resources www.abmresources.com.au/ Full ABM Resources profile here ABM Resources (ASX: ABU) is a S&P/ASX 300 gold exploration company with a resource base of 3.5 million ounces in the highly prospective Central Desert of the Northern Territory, Australia.
ABM has a multi-tiered approach to exploration and development with a combination of high grade potentially short term production scenarios such as Old Pirate and the Golden Hind, and large scale discoveries such as Buccaneer.
Thursday, August 01, 2013 by Proactive Investors
Location of Trial mining at Old Pirate
ABM Resources' (ASX:ABU) trial mining at the Old Pirate high grade project in the Northern Territory of Australia is continuing apace, with 1,800 to 2,000 tonnes of the gold bearing material extracted to date.
Investors may recall that the trial Mining is the equivalent of a feasibility study for Old Pirate, with the added bonus it will also produce gold and generate cash flows immediately.
Trial mining is designed to pay for itself, which in the current market environment is a significant plus. The Pilot Plant is a low cost entry into mine development and processing.
It is designed to be cost neutral with gold sales projected to cover all costs of work including capital.
Metallurgical test work indicates that up to 97% of gold can be recovered from low cost / low capital expenditure gravity processing methods
The Old Pirate Trend consists of a series of gold-bearing quartz veins over a 1.8 kilometre strike length, consisting of three distinct vein clusters of mineralisation named Old Pirate, Old Glory and Golden Hind deposits.
The mineral resource at Old Pirate is 723,800 ounces of gold average grade of 11.96g/t Au.
Cannily, ABM is staging its approach to developing Old Pirate High-Grade Gold Deposit, where Stage One, conducted under an exploration license, involves the extraction and processing of up to 10,000 tonnes of gold-bearing material.
This will test the system for grade reconciliation, recovery and dilution management.
Ore is currently being stockpiled and pending processing.
One of the key advantages is that ABM can open up multiple high-grade mining areas over the nearly 2 kilometres of vein strike length exposed at surface.
The first 1 metre bench has been excavated with ore stockpiled and waste removed over 85 metre strike length.
Old Pirate high-grade quartz veins can be selectively mined to achieve higher grades from lower processed tonnes than in the model.
Golden Hind
The Golden Hind vein system is located approximately 600 metres south of the main Old Pirate Deposit. Some of the highest grade samples and best drill results on the project have been collected from this zone.
ABM has completed the first 1.5 metre bench at the Golden Hind, where two veins were observed over a 60 metre strike length with coarse visible gold throughout the excavation.
In addition, a silicified shale horizon on the hanging wall also contains high-grade gold.
Mapping has been completed and samples are pending analysis ahead of continued digging at the Golden Hind. It is intended, in the Stage One Trial Mining phase, to extract approximately 1,000 to 1,500 tonnes of high-grade ore of greater than 10g/t gold and up to 1,500 tonnes of lower grade ore of 5 to 10g/t gold from the top 5 metres of the Golden Hind.
Assembly of the Pilot Processing Facility
The assembly of the Pilot Processing Facility is well advanced. The facility involves a three stage crushing plant, gravity gold jigs for coarse gold, milling to approximately 100 micron, a Knelson concentrator for fine and coarse gold and upgrade tables.
The generator and fuel tanks have arrived and have been installed. The second-hand crushing circuit (jaw and impactor) has been installed, conveyors mounted, all motors have been tested and new electrical cabling has been added.
The Knelson concentrator tower and screen decks as well as the cyclone tower have also been assembled on site. The process water / tailings storage facility has been completed and is fully lined and is currently filling with water required for start-up. After a short delay due to transport permitting in Queensland the ball mill has now arrived on site and is being installed.
Due to the minor delays, commissioning is anticipated to commence in the next one to two weeks.
Darren Holden, managing director of ABM Resources said “We are very pleased with the progress of the Trial Mining with frequent visible gold identified throughout all mined areas to date.
"Of note, there is a considerable zone of thickened multiple veins in the Old Pirate South area covering a much larger footprint than previously sampled.
"New quartz veins and extensions of known quartz veins are being identified on a regular basis and are being sampled for possible inclusion in the processing.
"We are frequently observing both coarse and fine visible gold during mining. Work on the processing plant is continuing and we now anticipate commencing commissioning in one to two weeks.”
Other key points from trial mining process:
- Frequent coarse visible gold (>0.5mm) observed throughout excavation process.
Old Pirate South High-Grade - First 1.25m bench excavated with ore stockpiled from 80m strike length high-grade section. - Frequent fine visible gold (<0.5mm) and occasional coarse visible gold. - Upon excavation the 6m x 6m blow-out (averaging 77g/t gold) observed at surface, has an increased footprint of 10m x 8m with multiple thick quartz veins with coarse visible gold observed frequently. - Old Pirate South veins continue at least 20m further along strike beyond previous surface sampling.
Old Pirate Eastside Vein High-Grade - First 1m bench excavated with ore stockpiled over 60m strike length. - As predicted from surface work, vein varies from 30cm to >1m width. - Fine visible gold (<0.5mm) frequently observed during excavation process.
Western Limb High-Grade - Waste material on hanging wall removed over a 300m strike length. - Ore extracted from over 60m strike length (partially complete first bench). - Coarse visible gold observed frequently.
Old Pirate Central, Southern Western Limb, Eastern Limb, SE Veins and Heartland veins: - All top soil cleared. - Mining areas marked out in preparation for excavation.
Pilot Processing Plant Facility: - Tailings dam complete and fully lined. - Crushing plant installation complete. - Knelson concentrator tower erected and concentrator positioned. - Ball Mill arrived and being installed. - Commissioning of plant anticipated to commence in one to two weeks.
Analysis
ABM is moving further down the road to trial mining production and cash flow generation from the first stage of mining at Old Pirate. With commissioning of the pilot processing facility expected within the next one to two weeks, it is valuation accretive and should give ABM a shot in the arm. It is also the first step in un-locking the gold riches from its gold discoveries in the Northern Territory.
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ABU Price at posting:
3.7¢ Sentiment: Buy Disclosure: Held
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