Central China Goldfields looks to expand Bullabulling gold resource in 2010

UK-registered copper and gold miner Central China Goldfields (LON:GGG) is targeting an expansion of its resource base and planning extensive work on its flagship Bullabulling project in the new financial year after disposing of its Chinese assets, making a strategic decision to focus on Australasia and entering a JV (joint venture) agreement over Bullabulling with Auzex resources during 2009.

During the “year of transformation and redirection,” Central China disposed of Nimu copper deposit in China due to the adverse local business situation and the negative impact of the global financial crisis. The loss of Nimu was an “immense disappointment” for Central China, though it did strengthen its balance sheet and allowed it to change geographic focus. The project generation and acquisition efforts undertaken in H2 2009 led to the evaluation of a number of gold and copper projects and the signing of a low cost option on the Cikoleang gold project in Indonesia.

An option to acquire 50% of Bullabulling was signed in February 2010 and exercised in April. The acquisition price amounted to US$6 per ounce of gold for 430,000 oz of known measured and indicated resource attributable to Central China. The consideration amounted to US$3 million, consisting of a US$0.5 million option fee and a US$2.5 million payment for the 50% stake.
The company and partner Auzex Resources (ASX:AZX) are currently undertaking work aimed at increasing that resource.

An updated JORC compliant resource estimation is expected to be reported by September/October 2010 following the currently ongoing diamond drilling campaign. The drilling is designed to validate the entire existing drill dataset of over 12,000 holes.

This will be followed by the feasibility study, currently anticipated to commence in Q4 this year.

Meanwhile, Central China, which is set to change its name to GGG Resources, has pledged to continue to expand its asset base in the Australasian region.

“Bullabulling is shaping up to be the main value driver for the company, however we will continue to seek investment opportunities in the Australasian region to expand the Company's asset base. Our work in the latter half of 2009 brought us many leads which we are keen to explore further,” said Chairman of Central China Peter Ruxton.

On the financial front, pre-tax losses from continuing operations for the full year to 31 December 2009 amounted to £0.55 million compared to last year’s £0.52 million.

Bullabulling, in the Yilgarn Craton gold province, has an established resource of 9.3M tonnes at 1.4g/t gold for 431,600ozs.

Drilling at Bacchus previously intersected gold mineralisation with intercepts of 7 metres at 77 g/t (grammes per tonne) gold, 5 metres at 14 g/t gold, 4 metres at 5.08 g/t gold, 3 metres at 4.43 g/t gold, and 3 metres at 9.16 g/t gold beneath the existing Bacchus Pit.