Australian BMG Resources Ltd reported promising high-grade gold results at the Capital Prospect within its Abercromby project in West Australia's goldfields region.

The gold-focused exploration company completed a 2,613 meters diamond drilling (DD) programme in February which wrapped up a much bigger programme of a 6,700m combined Reverse Circulation (RC)/ DD programme of the prospect over the last six months.

According to the results released at the end of April, "new significant intersections of thick, high-grade gold" include 31 metres at 6.18g/t gold from 162 metres; 10 metres at 11.71g/t gold from 295 metres from a step-out hole "demonstrating significant strike extension potential to the East Lode"; and 13.8 metres at 6.56g/t gold from 446 metres, "confirming a deep southern high-grade plunge to the West Lode".

"We are really pleased with what came back. The diamond programme was really about finishing off some of the RC holes and testing depth and strike extensions," declared Bruce McCracken, BMG Resources' Managing Director, pointing out: "we now know that the system continues at depth."

"The out-take of the programme was very positive because of the extensions to the mineralised footprint at depth and along strike. That potentially increases the size of the mineralised area by at least two and it is still open in all directions. Therefore, we are really encouraged by what we saw," he added.

The 100%-owned Abercromby project is located on the Wiluna Greenstone Belt, one of Western Australia's most significant gold-producing regions with a gold endowment of +40Moz gold - second only to Kalgoorlie globally in terms of historic production. It was acquired in October 2020 through the acquisition of Oracle Mining Ltd.

Air Core programme 

The company also completed a 10,300m Air Core Programme (AC) to the south of the Capital - testing key structures identified by the Surveying and Mapping (SAM) survey - in February. Results have been released on 02 May.

"We are hopeful that we are going to see some good anomalous gold results in certain area. We will follow up with further work to the south of where we are operating in the area with the aim of making another discovery of the nature of what we are seeing at Abercromby," declared McCracken.

Looking ahead

In the short term, BMG Resources will focus on building and understanding resources. Now that the company has identified strong mineralisation, McCracken highlights that the next phase will be further drilling "to continue to probe and define the areas that we are working on, to continue to extend them, and then to ultimately put an initial JORC resource on the project".

The project being in the exploration phase, it is far too early to consider a date for gold production start which could take about 2-5 years, "depending on exactly what scale of production you are seeking initially", explained McCracken.

BMG plans to focus on gold, although other base metals are known to be in the region, such as nickel, slightly to the south of Abercromby, in addition to other minerals through the system.

"In terms of what we are looking at with this Abercromby project, it is very much a pure gold deposit," believes McCracken. "The sort of grade and scale we are looking at for a gold operation seems reasonably robust, so we are comfortable that it would be a pure gold operation at this point," he added.

The company is not looking at further acquisitions so far but could look at processing opportunities at some point, being close-by with operations at Wiluna mines and Northern Star' Resources Ltd's Jundee mine.

"You would look at those types of scenarios if they made commercial sense to the parties involved, whether it is something you may do initially to save capital investment while you bring something into production would be considered. Ultimately, in terms of opportunities to add to the portfolio and to grow the company, we are always open. But none of that is critical at present given our current opportunities," told McCracken.

Open-cut and underground combination

Following the acquisition of the project, early drilling from December 2020 highlighted that "gold starts from near surface" through the oxidised zone continuing at depth into the fresh rock, "supporting potential for open pit mining ", with shallow intersections of 12m @ 2.56 g/t Au from 25m, including 2m @ 4.87 g/t Au from 25m and historical intersections of 6m @ 9.77g/t from 12m,15m @ 3.96g/t from 36mand 2m @ 27.9g/t from 27m.

"It is too early to be precise, but those results show that it is possible to look at an open-cut operation to start with and then look at the potential for underground, particularly if you get good grades continuing at depth," underlined McCracken.

When looking at gold assets in the region around the deposit, these operations are a combination of open-cut mines as well as underground. Some of these underground zones can go as deep as 800-1,000+ meters. In the area, some deposits' grade and size have improved with depth such as certain zones within the Wiluna mine, owned by Wiluna Mining Corp., which is the closest mine to the Abercromby deposit.

‘That is why we are very encouraged,from the latest round of drilling, to see the mineralisation at depth which suggests that the system is continuing deeper," said McCracken.

To compare to another similar gold region around the world, the Eastern Goldfields in Western Australia is said to have similarities to Canada's Abitibi greenstone belt style of formation and fit within that type of structure within the greenstone.

Other projects

 

In addition to its Abercromby project, BMG Resources also owns the Invicible project, located in the emerging gold and lithium district of central Pilbara, Australia.

The project, still at an early stage of exploration, is located near Calidus Resources Ltd, which is developing an operation along strike. "It is in the same structural zone that we are on", explained McCracken, so "we are looking at a Calidus style deposit".

"We know that there is gold in the area as there has been artisanal mining over the years, low tonnages but very high grades. We are looking at much bigger deposit. There is potential there," believes McCracken, as 19.31kg of gold was mined at a grade of 1,380g/t Au.

Geophysics work has been done on site and BMG Resources is going through field work to define high priority targets. "Ultimately, we will drill those and see if the results encourage more work. At this point, it is a prospective well-positioned tenement for gold exploration."

Regionally, a growing number of lithium projects in the district indicates potential for Li bearing pegmatites at Invincible. The company reported that field work is currently underway to evaluate the potential 

Also in Australia, BMG Resources also owns the South Boddington project, located along the strike from the giant Boddington gold deposit (+40Moz Au). The company has two exploration licences in application stage. According to McCracken, the area sits within similar stratigraphy to Newmont Corp.'s Boddington mine, Western Australia's largest gold mine.

Finally, the company's Treasure project in Cyprus is a minority holding, which may very well be divested in the next few months under existing option arrangements with the majority partner for A$2m, which would be used to finance exploration for the other projects.