In my opinion, the recent BBX drilling results from their Plato Project in Brazil are one of the most exciting stories that I have come across amongst the recent batch of mineral exploration quarterly reports. The story started with their 12 October reporting of a shallow 55m diamond drilling intersection with widespread visible gold, it has continued with a visually similar intersection in the second hole, and the drilling is ongoing, with assay results from the visible gold zone in the first hole expected within 20 days of their 26 October announcement, ie. this weekend.
There is a lot to like about the company and the work that it has in progress at Plato.
Firstly, I really like the sound of the company’s directors and senior management:
- The Chairman is a geologist with 21 years in Brazil, as WMC’s Country Manager and Anglogold-Ashanti’s South American Exploration Manger, and brought one gold mine into production there
- The Exploration Manager is also ex WMC Brazil and has 34 years experience
- The CEO is former ANZ Head of Commodities Trade and Finance for North Asia
- One other Non-Exec Directors is a former Euroz and Paterson’s resource finance guy
- The other Non-exec is an ex-Lionore resource geologist, with capital raising and other corporate experience
These people clearly know what they are doing in Brazil, gold exploration and development, and in corporate finance. They are underplaying this in a completely professional manner, but are clearly optimistic about the visual drilling results and the forthcoming assay results.
I also very much like the visual description released of the logging results from diamond drill hole JED001 (BBX’s 12 October ASX release):
- The log includes what appears to be a 55m intersection, from 64.9 down hole, consisting of grey siliceous rock with abundant fine-grained magnetite and arsenopyrite, and with finely disseminated visible gold throughout.
- The fine grained gold is described as ‘disseminated’, which implies that it is scattered throughout the body of this siliceous rock, and not just localised on the exposed fracture surfaces that form natural breaks in the drill core.
- It has been logged as ‘disseminated gold’ in no less than 12 separate places, spread throughout the reported 55m intersection, and also as one instance of fracture coating (at 112.3m down hole)
- The single photograph of gold mineralised core that is included in that ASX release (at 115.52m down hole) is a cross-sectional surface, and possibly therefore a gold-mineralised fracture. It doesn’t look like a fracture surface though, and it does have four clearly recognisable specks of fine gold on it. The accompanying description states that ‘a total of 35 specks of gold were identified in this section of the core’.
- This implies to me that the 55m intersected silica unit probably has fine to microscopic gold mineralisation throughout its length.
- It’s impossible to guess what the overall gold grade of the intersection might be, but disseminated visible gold generally carries at least some appreciable grade: at least a gram or so per tonne I would imagine.
I also like the potential size of this mineralised silica cap, and the fact that this is only one of ten similar mineralised breccia pipe targets on the prospect:
- The magnetic survey results suggest that this first silica cap target has a potential area of 300 by 500m, with a true thickness in this first drill hole of 48m, giving it a potential tonnage 15 million tonnes at an SG of 2 tonnes/cubic metre.
And I also like the fact that the second diamond drill hole on the prospect (JED002, described in ASX release of 26 October) appears to have intersected 49 metres down hole (42.5m true thickness) of similar, but more richly sulphidic, mineralised silica cap rock, overlying a second, somewhat larger breccia pipe that has been tested by that hole.
As the company has said, the assay results for the first hole are due to be released in less than 20 days from the date of the 26 October ASX release, so should probably arrive this weekend of 14-15 November, and could therefore be expected to be released to the market by Monday 16 November.
The $US gold price might be a bit softer at the moment, but this is an Australian company and, with both the Brazilian Real and $A the now significantly fallen against the $US, and the $A gold price up around $A1,550 an ounce, the costs and profitability of a new gold mining operation in Brazil would not significantly impacted by this.
(20min delay)