Auzex Resources nets A$1.33m to advance Bullabulling gold project

Auzex Resources (ASX: AZX) will raise about $1.33 million through an underwriting agreement with BBY Limited for the listed A$0.13 options due to expire at 5pm (AEDT) on 13 February 2012.

The funds will be used to advance the work program on the Bullabulling Gold project, complete the merger with GGG Resources (ASX: GGB, LON: GGG) and provide working capital.

Importantly, this new cash will bump up Auzex’s cash in hand at the end of the December quarter of $4.6 million.


Bullabulling

Auzex is on track for a resource upgrade this month at the Bullabulling Gold Project after completing an infill drilling program.

The company has already started resource estimation work, which will be completed once results from the latest drilling program are received.

Currently Bullabulling has a JORC Resource of 78.8 million tonnes at 1.03 grams per tonne (g/t) for 2.6 million ounces of gold based on a 0.5g/t gold cut-off.

Drill results to date have continued to confirm the resource and geological model, with about 99% of drill holes intersecting gold mineralisation.

A Scoping Study has identified a substantial gold project capable of producing about 230,000 ounces of gold per annum over a 10 year mine life.

It showed the potential for cost improvements at the operating and capital cost levels that would enhance the project economics.


Geko Gold Project

Auzex and GGG have executed an option to acquire 100% of the Geko Gold Project strategically located just 17 kilometres from the Bullabulling project, which in turn is 70 kilometres southwest of mineral-rich Kalgoorlie in Western Australia.

The upside to the $3 million acquisition is the exploration potential for gold that may be complimentary to a future mining operation currently under Pre-Feasibility at Bullabulling.

Further highlighting the potential synergies between the two projects is the possibility of any future gold ore that is mined to be easily transported to Bullabulling for processing – providing the joint venture with economies of scale in the area.


Bullabulling Gold – Auzex, GGG Merger
Bullabulling Gold Limited has been incorporated and is due to be listed on the ASX in March.

Auzex has completed the demerger of its non-Bullabulling assets into a new public unlisted company, Auzex Exploration, while GGG will re-domicile to the ASX.

A search is underway for an independent chairman and a managing director to head up the new company.

The implementation date for the merger is proposed for March 27, 2012.

Originally published at: http://www.proactiveinvestors.com.au/companies/news/24938/auzex-resources-nets-a133m-to-advance-bullabulling-gold-project--24938.html