GGG Ggg Resources

 
TIDMGGG 
 
15 August 2011 
 
                             JORC Resource Update 
 
 
 
Bullabulling Phase One Drilling Programme delivers 2.60 million Ounces JORC 
Compliant Resource 
 
 
 
Highlights 
 
New JORC resource estimate from Phase One drilling of 2,603,000 ounces of gold 
at 1.03 g/t Au at a 0.5 g/t cut off. 
 
711,700 ounces converted from Inferred to Indicated Resource status. 
 
35,000 metres of Phase One infill drilling focussed on the 2.3km area between 
Bacchus and Phoenix pits. 
 
Bullabulling has now been partially re-drilled to JORC (2004) standard to 
enable the JV to move from JORC resources to reserves over time. 
 
Phase Two 70,000 metres infill drilling programme is currently underway aiming 
to upgrade a substantial portion of the current 1.9 million Inferred Resources 
to Indicated status in Q1 2012 so that an initial JORC ore reserve can be 
estimated. 
 
Additional 20,000 metre exploration drill programme is also in progress 
targeting Gryphon, Kraken, Minotaur and Edwards on southern extension of the 
Bullabulling Trend. 
 
Preliminary Project optimisation studies indicate potential for a high 
conversion rate from resource category to reserve category once the project 
economics have been finalised. 
 
 
 
 
 
 
Mineral Resource Estimate Overview 
 
The Phase One JORC (2004) compliant Mineral Resource estimate for the 
Bullabulling Gold Project near Coolgardie, Western Australia has been updated 
to 78.84 Mt at 1.03 g/t Au (2.60 million ounces contained gold) using a 0.5 g/t 
cut-off (Indicated and Inferred).  The new mineral resource has been estimated 
to the 200RL, approximately 230m below surface, and remains open at depth and 
to the south. 
 
 
 
The Phase One drilling programme, totalling approximately 35,000 metres, which 
primarily comprised QAQC (confirmation drilling) was completed in mid May 2011. 
Through a planned programme of twinning and the infill of previous drill holes, 
the project's resource consultant, the Snowden Group ("Snowden"), which is 
based in Perth, has been able to confirm the historic drill data as being 
statistically valid for use in a new resource estimate. Most of the Phase One 
drilling intersected known mineralisation in the existing CSA Global resource 
estimate which was prepared in mid-August 2010. Subsequent statistical studies 
on defining the drill spacing for Indicated and Inferred Resources were 
recently completed and the recommendations published recently (Monday 8th 
August 2011). The drill spacing recommended by Snowden for defining Indicated 
Resources has been set at 75m north-south and 35m east-west which has been used 
to classify the new resource estimate. 
 
 
 
The previous reported JORC (2004) compliant mineral resource was an Inferred 
Resource of 41,517,000 tonnes at 1.48 g/t Au (1.98 million ounces of contained 
gold) at a 0.7 g/t Au cut-off to an assumed economic mining depth of 315m RL, 
approximately 120m below surface. The same resource at a 0.5 g/t Au cut off is 
an Inferred Resource of 75.013 MT  at 1.08 g/t Au (2.61 million ounces of 
contained gold). 
 
 
 
The updated resource estimate for the Bullabulling Project, including the new 
QAQC drilling, was completed by Snowden Group (a summary letter describing the 
data and techniques used and the resource estimate is appended). The estimation 
used assays from all the historic reverse circulation (RC) and diamond drill 
hole data, but excludes the RAB drilling data (previously included in the 
August 2010 resource estimate completed by CSA Global), over a 9 km2 area 
covering the Bullabulling Trend. 
 
 
 
Multiple Indicator Kriging ("MIK") was used to establish the resource estimate, 
after the data were unfolded, using Datamine software. Variography carried out 
on the unfolded data provided ranges of up to 208m along strike and 108m down 
dip. These ranges were then used to design the primary search ellipse 
dimensions used in the modelling, which were 50m along strike, 25m down dip and 
15m across strike. The variography reconciles well with the orientations of 
mineralised shoots derived from the recent structural study. 
 
 
 
The updated Bullabulling Trend resource estimates by Snowden (at a 0.5g/t Au 
cut off) are listed in Table 1. The Gibraltar estimate was complied by CSA in 
2010 while the Laterite Dumps estimate was compiled from data taken from 
previous company reports dated 1998. 
 
 
 
Recent feasibility studies on processing cost and mining cost estimations 
suggest a 0.5 g/t Au cut off is appropriate for this project at current gold 
prices and this, and future resource estimates, will be quoted at this cut off. 
 
 
 
  Table 1. The Bullabulling Mineral Resource (August 2011) at 0.5 g/t cut off 
                                  (JORC 2004) 
 
  Mineralisation Type    Cut   Class   Tonnes (Mt) Gold grade g/t Contained 
                         Off                                       Ounces 
 
                         (g/ 
                          t 
                         Au) 
 
 Bullabulling Laterite   0.5 Inferred      1.6          0.89       45,700 
 
   Bullabulling Fresh    0.5 Indicated    21.3          1.01       691,000 
 
                         0.5 Inferred     50.9          1.03      1,683,900 
 
Bullabulling Trend Total                  73.8          1.02      2,420,600 
 
       Gibraltar         0.5 Inferred      4.5          1.12       161,900 
 
     Laterite Dumps      0.5 Indicated     0.5          1.2        20,700 
 
      Grand Total                         78.8          1.03      2,603,100 
 
 
Note: The resource is quoted for blocks with a grade of greater than 0.5 g/t 
and the tonnage figures for the fresh mineralisation have been discounted by 7% 
to allow for the impact of barren pegmatite dykes. 
 
 
 
 
 
Commenting on the independent JORC compliant mineral resource estimate, Jeff 
Malaihollo, GGG's Managing Director said: 
 
 
 
"The Phase One JORC update demonstrates that Bullabulling is a very large and 
highly continuous system capable of achieving an initial ore reserve of over 1 
million ounces of gold. The JV has made some assumptions on costs to optimise 
the pits based on the current resource update. Future drilling will be done 
primarily within these optimised areas which should translate to a high 
conversion of resources to reserves. 
 
 
 
The Phase Two drilling programme should run to the end of 2011 and this we 
expect this to deliver an upgrade of portions of the Inferred Resource to 
higher categories. Drilling is also in progress on exploration targets at the 
southern extension of the Bullabulling Trend such as Gryphon, Kraken, Minotaur 
and Edwards, which we expect will provide additional resources." 
 
 
 
The resource estimate was reviewed statistically, checked on plan and section 
and compared against the ore that was previously mined from the Bacchus North 
and South pits. The reconciliation against the ore mined was good with 
3,679,000 tonnes at 1.39 g/t Au predicted by the estimate compared to 3,040,000 
at 1.59 g/t Au reported as mined. The difference in tonnes and grade is due to 
the different block sizes used for mining compared to the resource estimate, 
with the larger block size used for the estimate resulting in a lower average 
grade, but higher tonnes for a similar number of ounces. 
 
 
 
Reconciliation with previous resource estimate 
 
There are a number of important differences between the CSA Global estimate 
that was published in August 2010 and the current Snowden estimate that makes 
comparing them difficult. 
 
 
 
The Snowden resource estimate excludes all previous RAB drilling (4,485 holes 
for 127,888 metres) and excludes the Gibraltar resource, which accounts for 
162,000 ounces of gold at a 0.5 g/t Au cut off. The areas modelled are 
therefore significantly different with the CSA model covering a larger area 
including Gibraltar and areas with RAB drilling. Snowden will now work on a 
separate resource estimate for Gibraltar, which will require a different block 
size and search orientations. 
 
 
 
Snowden also concluded that pegmatite and other late stage dykes comprise about 
7% of the total number of metres drilled in the Phase One drilling. They have 
therefore reduced the reported resource estimate tonnage and consequently 
contained ounces of gold by 7% to take account of dilution due to unmineralised 
pegmatite dykes. In contrast the CSA August 2010 estimate had no reduction for 
the pegmatite dykes as the model already assigned no grade to the unmineralised 
dykes. 
 
 
 
The CSA model used an Ordinary Kriged estimation technique with no top cut 
applied to the input data and was reported at a 0.7 g/t Au cut off whereas the 
Snowden  estimate used a Multiple Indicator Kriged estimation technique that 
statistically reduces the influence of high grade gold outliers and is reported 
at a 0.5 g/t cut off. This has increased the tonnes and reduced the average 
grade of the reported resource estimate. 
 
 
 
The Snowden model is effectively constrained to a maximum depth of 230m, 
whereas the CSA estimate was constrained by to an area above the 315 RL, which 
equates to a depth of 120m. 
 
 
 
The Snowden model uses a slightly larger block size of 25x10x5m compared to a 
20x10x3m block size used by CSA. The larger block size will tend to lower the 
average grade and increase the tonnes. 
 
 
 
The material bulk densities used by Snowden are 1.8 for oxidised and 2.9 for 
primary compared to 1.8 for oxidised and 2.6 for primary in the CSA model. The 
higher bulk densities used in the Snowden model will increase the tonnes and 
consequently ounces of gold in the fresh material. 
 
 
 
The two estimates, when compared over a similar area and depth, give similar 
results when the differences in bulk densities and block size are taken into 
account. 
 
 
 
Preliminary Project Optimisation 
 
Four optimisations scenarios were developed to check the new resource estimate 
and to assess the economic potential of the Project. The optimisations were 
carried out using a spot gold price (US$1,500 and exchange rate of US$1.07), 
recovery of 92.5%, a discount rate of 8% and process rates of 3.5, 5.0, 7.5 and 
10 million tonnes per annum ("mtpa"). No mining dilution was applied on the 
basis that the MIK resource model incorporates some degree of dilution and a 
mining recovery of ore 95% was used. 
 
 
 
All scenarios returned positive economics and all scenarios mine a main pit 3.1 
km long and 180m deep and a second pit at Bonecrusher that is 1.0 km long and 
120m deep. The scenarios provide between 9-13 year mine life, with potential 
ore reserves of over 1 million ounces of gold, which equates to a resource to 
reserve conversion of 55-80%. The stated ore reserve target for the Project of 
1.0 million ounces is expected to be achieved. The annual production range is 
105,000 to 240,000 ounces of gold at an average grade of from 0.8 to 1.0 g/t Au 
and the strip ratio ranges from 3.4 to 2.6. Importantly, all scenarios include 
a significant proportion of the new Indicated and Inferred Resources, which 
means with infill drilling these resources will convert directly to reserves. 
Consequently, confidence of meeting the new reserve targets is high. 
 
 
 
If new mineralisation can be found at the exploration targets to the south or 
at depth the project economics will continue to improve. 
 
 
 
Future work plan 
 
There is now less than 45,000m of infill drilling required to convert a 
significant portion of Inferred Resources to Indicated Resources. This infill 
drilling should be completed by the end of 2011. 
 
 
 
The exploration targets in the south of the Bullabulling Trend at Sphinx, 
Medusa, Edwards, Gryphon, Kraken and Minotaur will also be drilled during this 
period which should add to the current resource base. A new resource estimate 
will be undertaken by Snowden once this phase of drilling has been completed. 
 
 
 
In addition we are advancing the following; 
 
Preliminary engineering design 
 
Capital and operating cost estimates 
 
Optimisation and ore reserve estimation 
 
Updating and upgrading resource estimate based on Phase Two drill programme 
 
High grade deep exploration drilling 
 
Feasibility study 
 
 
 
Competent Person Statement 
 
The information in this letter/report that relates to the Exploration results, 
the 1998 Mineral Resource estimate and data that was used to compile the 2010 
and 2011 Mineral Resource estimates is based upon information compiled by Dr. 
Jeffrey Malaihollo who is a full-time employee of the Company and Fellow of The 
Australasian Institute of Mining and Metallurgy and a fellow of the Geological 
Society of London. He is qualified as a Competent Person under the Code for the 
Reporting Mineral Exploration Results, Mineral Resources and Mineral Reserves, 
2004 ("The Reporting Code") prepared by the Australasian Institute of Mining 
and Metallurgy and the Australian Institute of Geoscientists. Jeff Malaihollo 
consents to the inclusion in the report of the matters based on his information 
in the form and context in which it appears. 
 
 The information in this letter/report that relates to the 2010 Mineral 
Resource estimate is based on information compiled by Steve Hodgson.  Steven 
Hodgson is a member of the Australian Institute of Geoscientists (MAIG) and has 
sufficient experience which is relevant to the style of mineralisation and type 
of deposit under consideration and to the activity to which he is undertaking 
to qualify as a competent person as defined in the 2004 edition of the 
"Australasian Code for Reporting of Exploration Results, Mineral Resources and 
Ore Reserves".  Steven Hodgson is a full-time employee of CSA Global Resource 
Industry Consultants.  Steven Hodgson consents to the inclusion in the report 
of the matters based on his information in the form and context in which it 
appears. 
 
The information in this letter/report that relates to the 2011 Mineral Resource 
estimate is based on information compiled by Richard Sulway.  Richard Sulway is 
a member of the Australasian Institute of Mining and Metallurgy (MAusIMM) CP 
and has sufficient experience which is relevant to the style of mineralisation 
and type of deposit under consideration and to the activity to which he is 
undertaking to qualify as a competent person as defined in the 2004 edition of 
the "Australasian Code for Reporting of Exploration Results, Mineral Resources 
and Ore Reserves".  Richard Sulway is a full-time employee of Snowden Mining 
Industry Consultants Pty Ltd.  Richard Sulway consents to the inclusion in the 
report of the matters based on his information in the form and context in which 
it appears. 
 
 
 
 
 
Maps showing the JORC areas and pit optimised areas referred to in this 
announcement is available on the version of this release available on the 
Company's website. 
 
General Enquiries, please contact: 
 
Dr. Jeffrey Malaihollo       Westhouse Securities Limited (UK Nominated 
                             Adviser) 
MD, GGG Resources plc (UK) 
                             Tom Price / Martin Davison 
Tel: + 44 1992 531820 
                             Tel: + 44 20 7601 6100 
Email: www.gggresources.com 
 
Neil Boom                    Collins Stewart Europe Limited (Broker) 
 
MD, Gresham PR Ltd (UK).     John Prior / Adam Miller 
 
Tel: + 44 7866 805 108       Tel: + 44 20 7523 8350 
 
David McArthur               David Brook 
 
GGG Resources plc            Professional Public Relations (Australia media) 
(Australia) 
                             T: +61 8 9388 0944/ +61 433 112 936 
41 Stirling Highway 
                             E: david.brook@ppr.com.au 
Nedlands, WA 6009 
 
Australia 
 
Tel: +61 8 9423 3200 
 
 
 
 
 
 
 
 
 
 
 
Glossary of Technical Terms 
 
 
 
Assay          Quantitative analysis of a substance to determine the proportion 
               of some valuable constituent 
 
Au             Gold 
 
Cut off        Limit 
 
g/t            Grams per tonne 
 
JORC           Joint Ore Reserves Committee 
 
Indicated      In situ Mineral Resource calculated with a moderate confidence 
resource       level to which economic parameters have not been applied 
 
Inferred       In situ Mineral Resource calculated with a low confidence level 
resource       to which economic parameters have not been applied 
 
Km             kilometres 
 
Laterites      Soil types rich in iron and aluminium formed in hot and wet 
               tropical areas 
 
M              Metres 
 
Measured       In situ Mineral Resource calculated with a high confidence level 
resource       to which economic parameters have not been applied 
 
Multiple       A version of indicator kriging working with a family of 
Indicator      indicators 
Kriging 
 
Ordinary       Geostatistical method to interpolate the value at an unobserved 
Kriged method  location from observations of its value at nearby locations 
 
Pegmatite      A very coarse-grained, intrusive igneous rock 
 
QAQC           Quality Assurance / Quality Control 
 
RAB            Percussion (pneumatic) Rotary Air Blast drilling 
 
RC             Reverse Circulation drilling 
 
RL             Reduced Level 
 
Variography    The degree of spatial dependence 
 
 
 
 
 
 
END 
 

GGG Resources (LSE:GGG)
Historical Stock Chart
From Jun 2024 to Jul 2024

GGG Resources (LSE:GGG)
Historical Stock Chart
From Jul 2023 to Jul 2024