What the Brokers Say
WHAT THE BROKERS SAY: Interesting news and views from across the Resource Analyst universe.
Blackham Resources (ASX: BLK)
The Matilda gold project (MGP) covers a large tenement position in the Wiluna Greenstone Belt.
The global resource is 24.8 million tonnes at 1.9 grams per tonne gold (1.5 million ounces) and Blackham is steadily building confidence to transition into production – either on a stand-alone basis or by accessing the nearby Wiluna gold plant.
In a difficult market, Blackham enjoys strong financial support from its cornerstone shareholder Great Central Gold (GCG).
Blackham Resources continues to make significant progress in its aspiration of becoming a self-sufficient gold producer, having increased its MGP resource to over 1.5Moz of contained gold at an average grade of 1.9g/t, as well as steadily upgrading the confidence levels for its resources.
Overall, the MGP resource has been increased by 380 per cent since acquisition of the project in November 2011, most recently upgrading the Williamson deposit resource to 6.3 million tonnes at 1.7g/t gold for 0.35 million ounces, of which 2.7 million tonnes at 1.7g/t gold (0.15 Moz) is now in the Indicated Resource category.
Significantly, the geological interpretation associated with the updated resource model has highlighted further exploration targets and opportunities to test for extensions to the mineralisation–in both open pit and underground settings.
Excellent exploration progress has also been achieved at the M1 deposit (Matilda Mine Area) where a thick, high-grade intersection (35 metres at 5.05g/t gold) confirms the potential for a proposed deepening of the existing open pit.
Blackham Resources is well funded to aggressively advance its exploration and assessment plans, having completed $3.3 million of placements at 21 cents per share to Great Central Gold, as well as reaching agreement to raise a further $10 million from GCG via a Convertible Note facility at 25 cents per share.
Bligh Resources (ASX: BGH)
Bligh Resources has a portfolio of five projects, predominantly prospective for gold and manganese at varying stages of advancement.
The projects of particular interest from a Breakaway perspective revolve around the Leonora Goldfields of Western Australia.
The Bundarra gold project is a relatively new addition to Bligh’s portfolio.
The company completed the acquisition during late December 2012, acquiring a 42.9 per cent interest in the project.
Bundarra is located within the historic Leonora region of Western Australia and hosts a recently upgraded JORC Resource of 7.48 million tonnes at 2 grams per tonne gold for 489,000 ounces.
The Bundarra acquisition provides near-term production and cash flow potential.
In April ’13, Bligh released the positive results of a Scoping Study which confirmed the development potential at Bundarra.
The Study was modelled on the previous resource of 318,000 ounces at 2.1g/t gold and assumed a nine year mine life based on 250,000 tonnes per annum process feed rate for 156,000 ounces of recovered gold.
Cash costs for the four deposits range between $886 to $1126 per ounce; with an average of $1036 per ounce.
Following the recent approx. 54 per cent resource upgrade to 489,000 ounces at 2g/t gold, the economics parameters of the project are being updated.
The resource upgrade also provides sufficient data for a maiden reserve estimate (expected within the coming months).
The Leonora gold project encompasses 49 square kilometres of prospective tenure and is located just six kilometres from the 3 million ounce Tarmoola gold project.
The company recently boosted its Leonora acreage position with the acquisition of the Little Wonder project, which hosts old gold workings dating back to 1894.
Exploration is at a relatively early stage however these projects augment the company’s Leonora exposure and provide numerous high-priority targets which will be followed up in due course.
The Bootu Creek Two project is strategically located 40km south of the OM Holdings’ (ASX: OMH) Bootu Creek manganese mine, which hosts a 32 million tonnes resource at 22.3 per cent manganese.
Bligh has a 100 per cent interest in a 130sqkm tenement that has been interpreted to host a similar geological and structural setting to that of the Bootu Creek deposit.
The Bootu Creek formation is the primary source of manganese mineralisation in the region.
Bligh has also recently agreed terms to earn up to 80 per cent in the neighbouring tenement, increasing its possible footprint in the area to approx. 266sqkm and ensuring access to rail is not hampered in the event of production.
The Kumarina project is highly-prospective for manganese mineralisation.
A desk-top review examining geology and recent air-core drilling results revealed that the drilling had intercepted paleochannels and supergene manganese enrichment (e.g. 15m at 17.5 per cent manganese oxide from 46m).
The supergene manganese enrichment is within the saprolitic shale zones between the Tertiary surface sediments and fresh bedrock.
The new interpretation of geology and drill results will be used to plan further exploration.
Bligh is an active explorer with a strong portfolio of projects located in well-known producing regions.
The favourable Scoping Study outcomes provide confidence the Bundarra project has sufficient merit to advance towards production.
Our view is reinforced by the recent 54 per cent increase to the JORC Resource which will likely lead to enhanced economics.
Bligh has an enterprise value of just $1.6 million and is highly leveraged to positive news flow.
The upcoming maiden Reserve estimate and revision of Scoping Study outcomes provides near term impetus for a company re-rating.
Disclaimer: The above is intended as a guide only. The Roadhouse accepts no responsibility for investments made from this advice, successful or otherwise.