Central China Goldfields (LON:GGG), alongside its JV partner Auzex Resources told investors that the independent structural study of the Bullabulling Gold Project has now been completed. The partners will now start the next phase of diamond drilling imminently.
The completion of the study and the upcoming drilling program represent a rapid progression at Bullabulling since Central China Goldfields recently acquired its 50% stake in the venture. Earlier this month, the company formally completed its acquisition, following the payment of AU$1.9 million. The partners have been carrying out detailed due diligence and field work since February 2010.
The structural study, carried out by Impel Geoscience’s Principal Geologist Dr Toby Davis, suggests that Bullabulling could potentially be a very large deposit, with mineralisation – between 0.5-1.5 grams per tonne (g/t) gold - can be traced on 40m spaced sections for nearly 6km long and 330m wide.
The study also identified that, within this low grade zone there are higher grade shoots of 3-4 g/t gold, which are continuous over hundreds of metres and 5-20m wide. Furthermore, all of the mineralisation is open at depth.
"The work in past few months by the Joint Venture has started to reveal the potential of the Bullabulling project with the scale of the project growing substantially”, Central China Goldfields MD Jeff Malaihollo commented. “The extensive database of drill results has meant that this transformative work has been done in a relatively short time period and at a low cost”.
“We look forward to the results of the planned diamond drilling programme and a revision the Bullabulling resource in Q3/Q4 2010". The partners intend to drill seven new holes totalling 1,400m, the program has been planned based on the recommendations from the study, in order to confirm the structural interpretation, test continuity of mineralisation and intersect historic mineralisation.
The company believes that each of the seven new drill holes has the potential to intersect significant mineralisation, and provide important geological information. The works programme has been submitted to the Western Australia Department of Mines, and drilling is expected to get underway in June and be completed by the end of July / early August.
The structural study was based on the results of 3D geometric modelling of the main primary deposits using the current drill database of over 12,000 individual drill holes. "It is clear that potential exists to redefine the resources within, and expand them beyond, existing drilling by applying the understanding of the structural process involved in gold mineralisation that were revealed in this study", Dr Davis commented.
“The proposed structural model for mineralisation indicates the likelihood of the deposits being highly linear at large scales with good continuity of gold mineralisation expected over hundreds of metres at both low and high grades”, Central China Goldfields stated.
The Bullabulling project straddles the Great Eastern Highway, 70 kilometres south west of Kalgoorlie in Western Australia. The property consists of 60 square kilometres with a series of licences and granted mining leases covering the typical Eastern Goldfields gold-bearing greenstone.
Bullabulling’s current resource stands at 9.3 Mt (million tonnes) grading 1.44 g/t gold for 431,600 oz, including 4.8 Mt grading 1.51 g/t gold for 237,000 in the measured category and 4.1 Mt grading 1.35 g/t gold for 180,800 in the indicated category.
Auzex had acquired all the rights, title and interest in Bullabulling from Jervois Mining Ltd and subsequently transferred them to the JV with Central China Goldfields. The JV parties intend to fast track the project to bankable feasibility within two years at an estimated cost of A$2.5 million.
The Bullabulling JV with Auzex, has become one of Central China Goldfields key projects as the company has transitioned away from its operation in the People’s Republic of China. A total of approximately £2.375 million has now been received from the proceeds of the sale of the company's Chinese assets. Central China Goldfields will start the process of closing down its wholly owned Chinese subsidiary Chengdu Mining Technology Development Ltd after which time the remaining funds of approximately £1.9 million will be transferred to the UK.
As further funds are received they will be used, primarily, to advance the Bullabulling project where the Company and its partner are looking to add to the existing 431,600 ounces of JORC compliant gold in situ on the project
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