At a recent lunch briefing Sir Lunchalot was entertained by the very English and extremely well mannered team of GGG Resources.
London-based AIM-listed GGG Resources recently decided that if its main project was located in Australia it might as well “Australianise” itself by listing on the local bourse.
The company’s major focus is on developing the Bullabulling gold mine located just outside Coolgardie in Western Australia with its 50:50 joint venture partner Auzex Resources.
The current JORC compliant inferred resource at Bullabulling is 41.5 million tonnes at 1.48 grams per tonne gold, for 1.98 million ounces of gold.
“The project has gone up now to (almost) two million ounces,” GGG Resources managing director Jeff Malaiholo told a table of hungry journalists.
“It was 400,000 ounces when we picked the project up initially.
“Two million ounces really covers the southern, 2.5 kilometre strike, of a six kilometre strike zone.
“It is artificially cut off at 120 metres depth simply because the density of historical drilling is not there.”
A lack of quality assurance or quality control data for historic drill holes meant GGG was unable to estimate the resource with any higher degree of certainty.
A current drilling program including some 5,000m of twin drilling parallel to the historic drilling is hoping to validate the historic data, which the company hopes to use in order to upgrade the current inferred resource to measured and indicated.
Three drill rigs, one diamond rig working on metallurgical testing and two RC rigs infill drilling to the east of the existing Bacchus and Phoenix pits, are currently operating at Bullabulling.
The RC drilling is testing the limits of the resource to the east as well as following up high-grade intersections that have shown up in the historic drilling.
Results of the drilling so far have corresponded with the historic data.
The joint venture is confident of being able to announce an updated JORC compliant measured, indicated and inferred mineral resource in the first half of 2011.
“The key thing about it is that it is a brownfields project,” Malaiholo continued above the clinking cutlery.
“It was mined before by Resolute Mining, which mined the oxide too.
“They took out about 350,000 ounces and effectively have pre-stripped the fresh material.
“The fresh material is at least 90% recovery, from historical data. It was mined for two years, so we know what the recovery is.
“We’re doing some additional metallurgical test work to check that – to check the variability, if you like, along the ore body.”
By listing on the ASX GGG hopes encourage Australian shareholders as well as providing access to two capital markets should it ever need to rattle the tin in order to raise additional funds.
“We are going to be a dual listed company,” Malaiholo said.
“The reason for that really, is that we want financial reach, both into London and into Australia.
“Obviously Bullabulling is a large low-grade deposit. It is already at two million ounces and we can see that expanding considerably.”
The company is expecting that in order to reach a satisfactory level of economies of scale the building a fairly large throughput plant will be required.
“At the moment we’re talking three million tonne per annum,” Malaiholo explained.
“That may increase as our drilling goes forward but at the moment our working hypothesis is three million tonnes per annum.
“To build that we are going to need financial reach…so it is important to get a few shares into a few institutions and that is why we raised $9 million in Australia and why we raised just over ten million pounds in the UK; to get set to take this project forward.”
GGG is eyeing completion of a feasibility study at Bullabulling by the end of this year.
Should that indicate the project to be economically viable the intention for GGG is to then push on in order to get into production as soon as it is able.