ABM Resources' (ASX: ABU) extensional exploration has uncovered widespread outcropping quartz veins at the Bandit South Area with the highest grade rock chip samples off the main at its Old Pirate trend in the Northern Territory.
Results of up to 108 grams per tonne gold were returned from the ongoing rock chip sampling at the Bandit Trend, which also returned results including 8.3 g/t and 13.1g/t gold.
ABM managing director Darren Holden said the results were comparable to parts of the Old Pirate and Golden Hind Deposits and followed on from the recently released high-grade rock samples at the Bermuda Prospect.
"ABM will continue exploration efforts on the Bandit Trend in particular on a target area beneath vegetation / cover immediately to the south of the high-grade rock samples," he added.
The Bandit Trend consists of an area more than 4 kilometres long and 1.5 kilometres wide with widespread and outcropping quartz veins hosted in sedimentary shale and sandstone sequences.
As with the Old Pirate Area, while much of the outcropping quartz is barren of gold, quartz veins can trend from barren to high-grade over short strike lengths.
The vein yielding the peak result outcrops over several metres and is approximately 20 centimetres wide as exposed at surface.
The area immediately to the south of this outcrop (along strike) is an area of vegetation and cover with no outcrop.
Analysis of geophysical data reveals a number of structures (faults and folds) under the cover that link through to the main Old Pirate area to the North West.
Overall the Bandit - Bandit South area shows anomalism over a 1.25 kilometre strike length.
Exploration work involving surface soil geochemistry and rock-sampling is continuing with further results expected shortly.
Ongoing Search for High Grade Gold
The result at the Bandit - Bandit South area validates the company's ongoing mapping and sampling work covering the many kilometres of strike length of other quartz veins within trucking distance of the Old Pirate plant.
This strategy, which was adopted following the discovery of the Golden Hind Deposit and its conversion into a high-grade indicated resource of 113,000 tonnes at 16.45g/t for 59,100 ounces of gold, has already resulted in the identification of high grade gold at the Bermuda Zone.
Multiple quartz veins exposed at surface over an area of 50 metres by 50 metres were discovered within the Bermuda Zone, with visible gold sighted.
Rock chip assays resulted in 51 surface samples, including duplicates, grading greater than 1 gram per tonne (g/t) gold with a maximum assay of 34.9g/t gold.
The central area of Bermuda has an average quartz vein sample grade of 5.26g/t gold.
Golden Hind had taught ABM's exploration team that quartz veins in the area can change in nature and transition from low-grade to high-grade over very short distances.
Old Pirate Trial Mine and Processing
ABM added that the construction of the Trial Mine and Pilot Plant remains on target and budget to commence digging in June 2013 and processing in July 2013.
The aim is to trial mine / bulk sample 10,000 tonnes of material to demonstrate grade, processing and recovery, mining methods, and dilution management.
A scalable 15tph modular gravity gold plant will be installed, multi-pass optimised for coarse and fine free gold targeting >90% recovery. Plant purchase is budgeting $2 million + $1 million installation costs.
This trial mining is stage one of a multi-stage approach to development at Old Pirate.
Long lead time items for fine gold recovery (Knelson Concentrator) have been ordered from Consep Pty Ltd and engineering of support structures is progressing.
AMTAS Pty Ltd in Perth has begun work on components for coarse gold recovery (scrubber and jig).
The crushing circuit and ball mill have been secured via Index Pty Ltd in Brisbane and are being refurbished.
The discovery of further high grade zones within trucking distance of the Old Pirate plant offers further open pit potential that could extend both the resource and mine life at the project.
Setting ABM apart from many of its gold company peers, the Old Pirate trial mining due to commence in June/July 2013 will generate cash flow almost immediately and is designed to pay for itself. The Pilot Plant is a low-cost entry into mine development and processing.
ABM is targeting 10g/t recovered grade for >3000 ounces of gold in the Old Pirate trial mining which will provide valuable data and is equivalent of a Feasibility Study.
The first stage trial at Old Pirate will progressively de-risk the project and be a forerunner for a larger stage 2 and stage 3 production. Proactive Investors estimates a near term price target of $0.05-$0.06 for ABM.
ABM is well capitalised to achieve its milestones in 2013 with $14.1 million in cash at the end of the December quarter 2012.
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