BMG Resources to build on maiden resource with drilling restart at Abercromby gold project

BMG Resources (ASX: BMG) has confirmed it will resume drilling this month at its wholly-owned Abercromby gold project in Western Australia.

Extensional drilling of high-grade zones within the main Capital deposit will aim to build on the project’s maiden resource of 11.12 million tonnes grading 1.45 grams per tonne for 518,000 ounces of gold.

The mineralisation is believed to extend across a strike of 1.2 kilometres, with the best past assays including 57.5 metres at 5.73g/t gold from 80m, 30m at 10.01g/t gold from 164m, and 26m at 6.07g/t gold from 192m, including 7m at 21.22g/t from 192m.

Growth strategy

BMG outlined an Abercromby growth strategy last month, based on the dual approach of targeted exploration drilling and development studies.

The plans are underpinned by a positive scoping study, which supports a rapid pathway to production and recognises the substantial financial upside potential of increasing the mineral resource.

Infill drilling during November is expected to convert existing inferred resources to the indicated category to support the development studies.

Drilling will be funded by a recent $1.5 million two-tranche placement to sophisticated and institutional investors that will see the issue of 150 million shares priced at $0.01 each.

Maiden resource

Non-executive chair John Prineas said the company had moved quickly to finalise arrangements for the new campaign.

“We delivered Abercromby’s large maiden resource after completing only three drill campaigns and at a discovery cost of just $8.35/oz, highlighting the project’s extensive gold endowment and the efficient exploration planning by our technical team,” he said.

“Our track record of results provides confidence in the potential for continued drilling success at Abercromby, which could significantly increase the size of the gold resource.”

Established region

The Abercromby project is located within two granted mining leases in an established mining region with access to infrastructure and proximity to a number of producing gold mines.

The ore’s favourable metallurgical properties have previously been confirmed by test work that concluded Abercromby’s mineralisation was free-milling in nature and amenable to traditional carbon-in-leach processing.

High gold recoveries were achieved in the range of 93% to 95%.