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ABM Resources Extends Old Pirate High Grade Deposit, Samples Of 52.3g/T Gold

ABM Resources (ASX:ABU) has extended again the Western Limb of the Old Pirate high grade gold deposit in the Northern Territory from surface sampling.

Old Pirate sits on the same exploration license as the large-scale / bulk-tonnage Buccaneer Porphyry Gold Deposit.

ABM has been exploring Old Pirate since 2010. An innovation of ABM has been to use systematic surface sampling in mid 2011 that provided a better understanding of the coarse gold and the associated statistical nugget effect.

There is an inferred and indicated resource totalling 565,000 ounces of gold averaging 10.5g/t gold (uncut) at Old Pirate.

Phase 4 sampling was designed to sample veins extensional to the Old Pirate deposit.

Highlights of the sampling along the strike length of veins were as follows:

- The Western Limb vein with narrow widths extends north with surface sampling returning 71m strike length at surface averaging 52.30g/t gold with a peak value of 576g/t gold

- Combined with previous extensional surface results, the Western Limb is now extended beyond the existing resource area for a total of 197m strike length of surface quartz vein averaging 44.83g/t gold.

Darren Holden, managing director of ABM Resources said, "ABM recently reported high grade drill results including drill assays up to 156g/t gold from Old Pirate's Western Limb Extensions.

These latest drill results have extended the surface expression of the Western Limb vein a further 71 metres along strike with high grade gold once again. This vein is now confirmed mineralised over a total strike length of 540 metres."

The Western Limb Vein

The Western Limb vein at Old Pirate is a continuous quartz vein mapped and sampled for a total length of approximately 540 metres. The vein remains open to the north where it plunges under cover. The overall vein ranges in width from 4 metres to less than 10cm and contains regular high grade / coarse gold observed in hand-specimens.

Approximately 340 metres of this vein was included in the overall Old Pirate resource estimation released in April 2012. The surface expression of this vein has now been extended with this latest round of results. On 16/07/2012 ABM released results from surface sampling extending this vein beyond the existing drilling. Whilst the vein is mapped as narrow as 5 centimetres wide at surface the drill results (as noted in release dated 9/10/2012) show mineralised widths up to 6 metres.

These wider widths may be a result of varying width of the vein at depth or may relate to other sub-parallel mineralised veins either side of the main Western Limb vein that have not been shown at surface.

New Surface Sampling Results from Old Glory Prospect - assays pending

The Old Glory Prospect is a quartz vein outcrop approximately 500 metres south of Old Pirate and 250 metres north of the Golden Hind Discovery. Mineralisation is now confirmed in a pipe-like surface expression from multiple veins over an area approximately 12 metres by 5 metres.

A total of 34 systematic samples over this area recently returned an average grade of 19.69g/t gold and a peak value of 136g/t gold.

Two drill holes have been completed at Old Glory and assay results are pending.

Implications for Resource Development

Recent metallurgical test-work indicates that gold liberates readily from the quartz veins using simple crushing and gravity separation methods.

Further to existing resource estimation, ABM has conducted extensional exploration drilling, extensional surface sampling and has also drill-confirmed a new discovery at the Golden Hind Prospect located 800 metres south of Old Pirate.

Old Pirate sits on the same exploration license as the large-scale / bulk-tonnage Buccaneer Porphyry Gold Deposit.

Upon assessment of the overall scale and completion of requisite studies over the Old Pirate project area, which includes base-line environmental surveys, the Company will be in a position to apply for a mining lease. Environmental work has been conducted in tandem with on-ground exploration.

The company has also recently applied for a permit to conduct a 10,000 tonne bulk sample / trial mining exercise at Old Pirate.

The purpose of the trial mining will be to reconcile mineable widths, grade and metallurgical recoveries.

Surface Vein Sampling Rationale and Sampling Method

Gold in the Old Pirate area can be coarse (up to 5mm gold grains) and is hosted within quartz veins.

However, the distribution of the gold within these veins is not uniform, and hence drilling will likely under-call the overall grade due to the fact that there is a less than 1 in 5 chance of intersecting mineralised grades in any particular part of the vein.

Upon advice from external consultants, rigorous and systematic sampling of the quartz along the strike length of veins at Old Pirate was proposed. This work is akin to grade control of the first mining bench at Old Pirate.

Over 700m of sampling was conducted in 2011 and combined with drilling to estimate the gold resources at Old Pirate (16/04/2012). ABM has recommenced the program in 2012 of which the ongoing work is presented here.

This information, along with statistical parameters and extents of mineralisation, will be used to aid with further drilling and resource work.