ABM Resources (ASX: ABU) has doubled the company's global gold JORC Resource base to 3.3 million ounces contained within three distinct mineralised systems.
This resource highlights the rapid progress the company has made at its projects in the Northern Territory, coming within two years of the company starting exploration.
The 98% increase includes the delineation of a maiden Inferred and Indicated Resource at the Old Pirate gold prospect, which is part of the company's Twin Bonanza Gold Camp.
Old Pirate hosts a resource of 1.673 million tonnes at 7.95 grams per tonne (g/t) gold for 427,000 ounces of contained gold. This includes zones of 0.48 million tonnes at 14.84g/t gold for 231,600 ounces of gold.
ABM managing director Darren Holden told Proactive Investors today that the Old Pirate deposit is "old school", with similarities to systems mined in the gold rush days.
"It's one of the best high grade deposits that's never been mined in Australia, it's sticking out of the ground, there's no old workings on it," Holden said.
"We are really excited about what we can achieve there this year now that we understand the project, and we really want to push those high grade veins."
Holden also noted that Old Pirate has room to grow, with exploration concentrating on just one part of the deposit.
"What is exciting is that the resource is currently confined to just the central part of Old Pirate," he said.
"We have extensions to the currently sampled veins as well as at least 6 other key shale horizons containing high grade veins that are yet to be tested with trenching and drilling.
"We now believe we have cracked the code at Old Pirate."
Further exploration to extend the resource at Old Pirate is due to begin within weeks.
In addition to Old Pirate, ABM has upgraded the resource at the Buccaneer Porphyry Gold Deposit, which is also part of Twin Bonanza, and delineated a maiden JORC Resource for the Hyperion Project.
The upgrade in the Buccaneer Inferred and Indicated Resource represents an overall increase in gold ounces of 60%, about 1 million ounces, presented at varying cut offs. The base case is 127.9 million tonnes at 0.65g/t gold for 2.67 million ounces of gold, based on a 0.2g/t cut-off grade.
Meanwhile, the Maiden Inferred Resource at the Hyperion Gold Project is 2.977 million tonnes at 2.11g/t gold for 202,200 ounces of gold, based on a 0.8g/t cut off.
Holden told Proactive Investors today that ABM has taken less than two years to bring its projects from having nothing to having more than 3 million ounces of gold resources.
This has been achieved with overall discovery and definition costs of less than $4 per ounce based on expenditure across the three prospects over 2 years.
"What we've achieved in two years, in two field seasons from a standing start, we took on this company there were no geologists, no vehicles, there was no licences, there was nothing, and what we've actually turned it around in two years," Holden said.
Importantly, the company is in a strong position financially to be able to pursue activities at the projects, with $26 million in the bank at the end of the March quarter.
Holden told Proactive Investors that this was part of a strategy to protect the company in a difficult market.
In a further move to secure ABM's financial future, the company is investigating the possibility of generating cash from its projects at a low capital cost, with a potential production agreement with Tanami Gold, which has operations nearby.
"We have an agreement with Tanami Gold to investigate the possibility of putting ore through the Coyote gold mine so we'll be working with them," Holden said.
"The need not to necessarily build a mill is outstanding, for Old Pirate in particular. We could become a cash flow positive company with very minimal cash expenditure."
ABM's top priority now is extending the Old Pirate system, with further bulk trenching and drilling planned. Holden told Proactive Investors that the project could be in production by this time next year.
Exploration will also continue at Buccaneer and Hyperion, along with regional exploration on a number of other targets.
Today's resource upgrade is a truly significant milestone for ABM. Relative to its market cap and enterprise value and its peers ABM is currently trading at a third of its peer group average.
Until a feasibility study is complete the economics of monetising the system cannot be known precisely. However, in comparison to other bulk tonnage deposits such as Kinross Gold's (NYSE:KGC, TSE:K) Fort Knox Mine, ABM's three mineralised systems in the Northern Territory compare very favourably to many large scale bulk mining operations at comparative stages.