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ABM Resources On Track To Start Trial Processing At Old Pirate Gold Project

ABM Resources' (ASX: ABU) is on track to start processing of ore at its Old Pirate high grade project in the Northern Territory during July 2013 under the trial mining phase.

This phase, conducted under an exploration license, involves the extraction and processing of 10,000 tonnes of gold bearing material to test the system for grade reconciliation, recovery, and dilution management.

Head grades of at least 10 grams per tonne are expected for recovery of about 3,000 ounces of gold.

It is also expected to increase geological understanding of the mineralisation controls as well as expose new mineralised zones not previously identified as part of exploration work to date.

Notably, the staged development of Old Pirate, of which trial mining is the first phase, takes advantage of the low engineering risk at Old Pirate and allows ABM to keep up-front capital expenditure to a minimum.

Approval has been received from the Department of Mines and Energy to sell the gold product from the trial mining to cover the costs, which are estimated at about $5 million.

Progress to date

Accommodation units and offices have been installed and are now fully operational while the generator and fuel tanks for the pilot processing facility have being installed.

The three stage crushing plant refurbishment by Index Industrial as well as the Knelson concentrator and screen deck by Consep Pty Ltd have been completed and are expected to arrive within the week for the main part of installation on site to begin.

The final parts for the scrubber and jig are being painted and are expected to arrive on site in around 2 weeks.

Multiple other components, including electrical, pumps, control panels, cyclones, concentrating upgrade tables, support structures, mill balls and consumables remain on track and will be delivered to site over the next two weeks.

The ball mill refurbishment is being completed and is expected to be consigned within 2 weeks. Upon arrival the ball mill, as the last piece of the processing plant, requires relatively minimal on-site assembly and ABM is on track to commence processing during July 2013.

The process pad clearing is complete and the prefabricated concrete slabs for the processing plant have arrived on site and are being positioned in readiness for arrival of the mill-infrastructure.

The Tailings Storage Facility for the Bulk Sample is progressing with excavation nearly complete and dam lining materials on site and ready to install.

Ground conditions were more competent than expected and the excavation of the tailings area has proven slightly slower than anticipated. However, extra time was allowed for this eventuation and hence has minimal effect on the overall schedule.

The excavation of mineralised material for stock-piling has commenced at the Golden Hind Deposit.

In addition, the clearing of top soil at the project has uncovered several new quartz veins that were not previously identified at surface. This includes several splay structures about 10 metres long and 30 centimetres wide.

Mapping and sampling of these structures is underway and visible gold has been sighted within these new structures.

Clearing of material immediately north of the main Golden Hind high-grade zone has also revealed multiple quartz vein zones which are being sampled and mapped.

Ongoing exploration

Ongoing surface exploration has confirmed the potential of the Bermuda South area of its Old Pirate gold project in the Northern Territory with more high grade gold assays.

Systematic surface sampling has identified a 35 metre long structure with a peak sample of 45.7 grams per tonne gold and multiple quartz vein structures in a zone up to 20 metres wide.

A second zone to the east of the Bermuda South area has gold in surface samples over 6 metres by 12 metres with an average grade of 4.95g/t gold.

These mineralised zones provide a clear drill target for follow-up work and, subject to drilling success, are potentially additive to the overall mineral resource estimation at Old Pirate.

Old Pirate consists of a series of gold-bearing quartz veins over a 1.8 kilometre strike length, and three distinct vein clusters of mineralisation named Old Pirate, Old Glory and Golden Hind deposits.

Of these, Old Pirate is particularly high grade with resources of 723,800 ounces at 11.96g/t gold.


The trial mining phase will generate cash flow almost immediately and is designed to pay for itself, which in the current market environment is a significant plus. The Pilot Plant is a low cost entry into mine development and processing.

It is designed to be cost neutral with gold sales projected to cover all costs of work including capital.

It will allow scalability and optionality in a stepwise process. Importantly, the trial mining / bulk sample provides
valuable data and is equivalent of the feasibility study.

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