ABM Resources (ASX: ABU) continues to deliver impressive bonanza high grade gold discoveries from drill holes that are primarily outside and in addition to the Old Pirate April 2012 Gold Resource estimate.
Assays have been received from a reverse circulation program at the high grade Old Pirate prospect, which is located on the Twin Bonanza Gold Project in the Northern Territory.
The latest highlights from the Western Limb of Old Pirate include:
- 2 metres at 87.88g/t gold from 33 metres, including 1 metre at 156.5g/t gold;
- 2 metres at 35.40g/t gold from 73 metres;
- 3 metres at 10.11g/t gold from 84 metres; and
- 1 metre at 30.60g/t gold from 40 metres.
Darren Holden, managing director, commented: "The Old Pirate extensional work along with the recent spectacular results from the nearby Golden Hind Prospect provide valuable additions to the high grade system and the company intends to issue a resource update following completion of the 2012 program.
"Drilling is on-going with two rigs currently operational on site."
Old Pirate currently hosts a Resource of 427,000 ounces of gold at 7.95g/t gold (top cut) or 565,000 ounces at 10.95g/t gold (uncut).
Gold bearing quartz veins range from a few centimetres to over 6 metres in width and extend over an area of around 800 metres by 200 metres. Quartz veins are hosted in a folded interlayered sandstone / shale sequence.
News pending from Old Pirate and Golden Hind
Importantly for investors the news flow from ABM Resources will continue in the short term - as drilling is on-going at both Old Pirate and the recent Golden Hind discovery - with further results expected shortly.
The Golden Hind prospect is located only 800 metres south of the Old Pirate Deposit, is a potential second high grade open pit for an integrated operation at Old Pirate.
Showing the potential of Golden Hind - just last week the prospect yielded the best grade / width intersection ever at Twin Bonanza Gold Camp, being:
- 42 metres at 44.02g/t gold (0.5g/t cut-off) from surface, including 15 metres at 118.5g/t gold (1.0g/t cut-off).
- The main high grade vein included in this section returning 3 metres at 546g/t gold.
Panning recovered around 12 grams of gold from 15 kilograms of material suggesting coarse gold grade is under-called at the laboratory.
ABM Resources is well capitalised to achieve its milestones in 2012 and into 2013 with $23 million in cash as at 30 June 2012.
The key point is that today's drill holes are mainly outside and in addition to the Old Pirate April 2012 Gold Resource estimate. The results will enable ABM to define a new resource update following completion of the 2012 program.
Of late, ABM's valuation has been on the move - from $0.039 to $0.06. Proactive Investors still considers the valuation to significantly undervalue the company based on its EV/gold resource ounce relative to peers. A further increase in Resource in late 2012 would accentuate the undervaluation - even more - providing current opportunity for investors. In addition, ABM has strong newsflow to both re-inforce and challenge current valuation.
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