Central China Goldfields (AIM: GGG) has notified Auzex Resources Ltd (ASX: AZX) of its intention to exercise its option to acquire 50 percent equity in the Bullabulling gold project, located in the Coolgardie area of the Eastern Goldfields of Western Australia.
The joint venture parties intend to fast track the Bullabulling project to bankable feasibility within two years at an estimated cost of A$ 2.5 million.
Central China is currently advancing plans for exploration and development work to update the resource and identify additional resources to grow the project, concentrating on accessing higher grade ore as well as lower cost surface ores, aiming to achieve a rapid payback of the invested capital.
Drilling to increase and further delineate the current resources will start within four months, with a structural study of the project to better understand the geological controls of mineralisation currently underway.
The due diligence work has identified targets beneath and between the existing pits, which includes 4 metres at 14.5 g/t (grammes per tonne) gold at the Dickson pit, 9 metres at 10.5 g/t gold at the Hobbit pit, 9 metres at 11.9 g/t gold at the Edwards pit, 3 metres at 21.2 g/t gold at the Endeavour pit and 7 metres at 77 g/t gold and 5 metres at 14 g/t gold at the Bacchus pit.
The current resource stands at 9.3 Mt (million tonnes) grading 1.44 g/t gold for 431,600 oz, including 4.8 Mt grading 1.51 g/t gold for 237,000 in the measured category and 4.1 Mt grading 1.35 g/t gold for 180,800 in the indicated category.
Approximately 14,000 oz gold has been produced by dump-leach between 2002 and the present time. Previous carbon-in-pulp (CIP) production undertaken between 1998 and 2002 is estimated at 7.9 Mt at an average grade of 1.45 g/t gold for 371,000 oz.
The operations will be funded from the consideration received for the sale of the Nimu copper project, with Central China currently repatriating the money to the United Kingdom, having received £0.5 million of the total £4.5 million into its bank accounts.
Disclosure: The author holds no positions in the company