Based on the top cut 300 gram per tonne (g/t) model, the total resource has increased 43% to 611,000 gold ounces, and there has also been a 300% increase to 234,100 gold ounces in the higher confidence Indicated category.
The overall gold grade has increased 27% to 10.1g/t, compared to the 2012 estimate of 7.95g/t, and there has been a 56% increase in the Indicated Resource grade to 8.19g/t, compared to the previous 5.25g/t.
The new resource also includes a maiden Indicated Resource at the Golden Hind Discovery of 113,000 tonnes at 16.45g/t (1g/t cut-off) for 59,100 gold ounces, including a high grade core extending from surface to 40 metres of 34,000 tonnes at 45.58g/t for 49,200 gold ounces.
Providing further exploration upside, the mineralised system at Old Pirate remains open to the north, south and at depth.
Darren Holden, managing director of ABM, commented: "These upgrades put the Old Pirate Deposit as one of the best undeveloped high grade deposits at surface in Australia.
"In particular, our 2012 work identified new zones as well as completed important infill drilling to greatly increase confidence of the model.
"This mineralised system is now defined over multiple high grade veins and zones, covering nearly a 2 kilometre strike length, and remains open in several directions.
"The Western Limb, for example, has potential to more than double in strike length, with high grade gold at surface, a further 800 metres along strike from the edge of the resource model.
"With the ultra-high grade Golden Hind Zone also at surface, along with exceptional metallurgical properties for gravity recoverable gold, we look forward to continuing exploration and implementing our trial mining tests."
ABM has applied for permits to conduct a 10,000 tonne bulk sample/trial mining operation at Old Pirate.
Holden told Proactive Investors today ABM is hoping to have the trial mining completed by the end of June.
Permits have been granted by the Central Land Council and by the Titles Division at the Department of Resources (Northern Territory).
ABM is now waiting on the mining authorisation to begin trial mining.
The purpose of the trial mine is to reconcile tonnes, grade and recovery and forms an essential part of feasibility assessment.
The trial mining involves installing a small scale gravity gold recovery plant which can subsequently be upgraded into a full scale plant.
There are several possible extensions, which are not included in the 2013 resource estimations, to the Old Pirate trend that warrant further work and could add additional ounces to the overall system.
These include the Western Limb along strike to the north and at depth, Eastern Limb along strike to the north, down plunge of the Old Pirate fold and further Golden Hind look-alikes.
A resource update, including a re-optimised model of the higher grade zones, is also scheduled to be released shortly for the Buccaneer Porphyry Gold Project, which is located 3 kilometres from Old Pirate.
ABM is currently undertaking geochemistry at the Twin Bonanza Gold Camp and expects to begin drilling again in March/April.
ABM is fast unlocking the gold potential of its Old Pirate deposit and today's resource upgrade propels the project even higher - into the ranks of one of the best undeveloped high grade deposits at surface in Australia.
The gold grades + near surface nature of the deposit give a hint as to just how good the Old Pirate deposit is, as well as potential for early cash flows from mining.
The Old Pirate deposit sits within ABM's Twin Bonanza Gold Camp, host to more than 30 targets, including high grade gold deposits and porphyry style (bulk tonnage) deposits.
Old Pirate hosts gold in quartz veins up to several metres wide and coarse visible gold from surface to depths of over 200 metres.
Significant exploration potential remains in repeat quartz vein structures identified by ABM.
A Scoping Study has indicated the potential of the deposit to generate $257 million in profit and require very low capital expenditure during its first two years of operation.
The move to begin trial mining will provide significant data for a Feasibility Study.
ABM is also well funded to continue proving up the potential of Old Pirate and the numerous other targets within the Twin Bonanza Gold Camp with around A$14.1 million in cash and no debt at the end of December 2012.
Investors can likely expect more news flow in the near term with a resource update for the Buccaneer Porphyry Gold Project due and trial mining also on the cards.
Proactive Investors believes the re-trace in ABM's share price in recent months provides an opportunity to gain exposure to high gold deposits, as well as trial mining and potential early cash flows.
With these catalysts and based on its Ev/Ounce we calculate a share price of $0.05-$0.06 as closer to intrinsic value forABM Resources.
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