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Blackham Resources drilling hits high grade gold at Galaxy

Published: 20:39 26 Aug 2015 EDT

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Blackham Resources (ASX:BLK) continues to build its free-milling resource with drilling returning up to 12.84 grams per tonne gold at the Galaxy deposit of its Matilda Project in Western Australia.

This could further improve the economics of the Galaxy pit, which is one of the high-grade, free milling deposits that will provide feed for the 1.3 million tonne per annum Wiluna Gold Plant.

Results from the recent diamond drilling program, which identified further high-grade mineralisation within the optimised pit shell, include:

- 2.5 metres at 12.84g/t gold from 80 metres and 7.5 metres at 3.58g/t from 113 metres (GLDD0003);
- 3.6 metres at 6.39g/t gold from 35.1 metres (GLDD0001); and
- 7.5 metres at 3.14g/t gold from 7.8 metres (GLDD0002).

The four diamond holes totalling 351 metres were drilled to provide further geological confidence, metallurgical samples and data for geotechnical assessment.

Pre-Feasibility drilling has now been completed to allow fast-tracked production.

The last two drill programs at Galaxy have confirmed the high grade shoots are stacked, flatter lying and have a greater strike extensions than previously modelled in the current resource block model.

A further reverse circulation drill program is currently being planned to drill the eastern extensions on the newly granted tenement prior to re-estimating the resources for the Definitive Feasibility Study.
Galaxy has current Indicated and Inferred Resources of 600,000 tonnes at 2.9g/t for 51,000 ounces of contained gold.

Bryan Dixon, managing director, commented:

“Blackham’s drilling, processing and mining studies have confirmed the Galaxy deposit as a high grade shallow deposit suitable to open pit mining with good metallurgical recovery to be fast tracked towards production.

“The recent drilling is likely to further enhance the economics of the Galaxy pit.   

“The Galaxy and Golden Age deposits are two high grade, free milling quartz reefs in the immediate vicinity of the Wiluna Gold Plant that Blackham intends to mine. These deposits are 13 kilometres apart with numerous quartz reef prospects in between.”


Drill Results


Holes GLDD0001 to GLDD0003 confirmed the presence of stacked shoots.

GLDD0004 targeted the south-western pit wall for geotechnical assessment but hit 3 metres at 3.97g/t from 86 metres.

All three of the high grade shoots in the pit design start almost at surface.


Recent Activity


Blackham’s recent drilling extended mineralisation at the M4 deposit to over 2,000 metres. This remains open along strike to the north and south.

The latest results are also likely to help further merging of M3 and M4 subpits which is likely to lower the stripping ratios.

In addition, bonanza gold grades of up to 1,148g/t gold were returned from maiden drilling at the free-milling underground Golden Age Reef.


Matilda Gold Project


The Matilda Gold Project has total resources of 44 million tonnes at 3.3g/t gold for 4.7 million ounces, all within a 20 kilometres radius of Blackham’s wholly-owned Wiluna gold plant.

Wiluna is capable of processing 1.3Mtpa of ore to produce 100,000 ounces of gold per annum.

The project has 4 million ounces of historic production and offers potential for further resource growth given that little systematic regional exploration has been carried out in over two decades.

Blackham has over 780 square kilometres of tenure and 55 kilometres of mine sequence strike.

Stage 1 of the company’s development program is focused on low-risk processing of free-milling ores.

This has a low start-up cost of $25 million, which will be financed out of its $30 million debt facility.

It currently has a free-milling resource of 22 million tonnes at 1.9g/t for 1.4 million ounces of gold with a mining inventory of 5Mt at 2.8g/t for 454,000 ounces of gold.


Analysis

Blackham Resources’ discovery of high grade gold grading up to 12.84g/t further raises the likelihood that the company will increase the free-milling resource at the Galaxy deposit.

Ore from this and other free-milling deposits will be used to recommission the Wiluna Gold Plant, which has low capital re-start costs of about $25 million that can be financed out of the company’s existing $30 million debt facility.

Focusing on free-milling ores allows the company to leverage the established low risk circuit at Wiluna of grinding, gravity and carbon in leach.

The benefits can be seen in metrics with operating costs are estimated at A$1,000 to A$1,100 per ounce, operating cash flow of A$147 million over an initial 4 years and payback in 9 months.

Wiluna can be rapidly brought into operation on receipt of approvals with production starting in 2Q 2016.

Blackham had $9.9 million in cash and investments as at 30th June 2015.



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