BSG bolnisi gold nl

finaly some exposure...article from

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    Theres also a net article on CNT there for those interested

    Date : January 9, 2003

    Bolnisi Gold Aims To Transform Itself Over the Next Couple Of Years.

    It looks as if 2003 could be the year when Bolnisi Gold comes into its own, though some of the work has been done already as the shares doubled in 2002. This company went to hell and back a couple of years ago when its partner at the Quartzite gold project in Georgia tried to snatch control of the operation from Bolnisi which had a 50 per cent interest and operatorship. The dispute started in the spring of 2000 and went on for well over a year. By that time Bolnisi chairman Norm Seckold had decided that it was too dangerous being a one project company and acquired the Roseby copper project in Queensland Australia followed by the Ocampo gold/silver project in Chihuahua State, northern Mexico.

    As might be expected the sheer geographical spread of these three operations lead to a bit of criticism and more recently there was a suggestion that Bolnisi had paid the wrong price for Ocampo. But the proof is in the pudding and the latest update on the project confirms that all is going well and that construction will commence early in the second half of this year with production by the end of the year. At the moment the feasibility study is well advanced with recent drilling results being used to update geological models. A robust and financially viable project is expected which should produce around 69,000 ounces of gold and 2.5 million ounces of silver which, using a silver to gold conversion ratio of 70:1, is equivalent to just over 100,000 ounces of gold equivalent/year. The initial cash cost will be around US$185/oz, but this should drop to US160/oz when production reaches a steady level, and the capex for the development work is expected to be US$10 million.

    Under its joint venture with Canadian listed Gammon Lake at Ocampo Bolnisi has the right to earn a 60 per cent interest in a defined area within the project and this contains the majority of the gold and silver which Gammon Lake has estimated as an indicated and inferred resource of 27.7 million tonnes at 1.49 g/t gold and 63 g/t silver. To earn its 60 per cent Bolnisi is acting as operator and has committed to putting the project into production at a rate of 1.25 million tonnes/year. If it does not succeed in this by September Bolnisi has to pay Gammon Lake an extra C$100,000 per month on top of the C$30,000 per month that it pays until the 60 per cent interest is earned. And as an extra goad, Gammon Lake retains 100 per cent of Gammon Lake if Bolnisi does not come up with the goods by March 2004.

    This is the sort of challenge that Norm Seckold likes and he sees no conflict with the Roseby copper project in North Queensland where Bolnisi stands to earn a 70 per cent interest by completing a feasibility study. In the past Pasminco estimated that Roseby has a resource of 62.3 million tonnes grading 75% copper at a cut-off of 0.5% which works out, very neatly, at 1 million lbs of copper. The whole of this is situated within the area designated for the joint venture with Universal Resources and it is interesting to note that this Australian junior has been quite successful in promoting itself simply on its minority share in the project and on its right to earn up to 70 per cent of the exploration tenements outside the project area by spending A$5 million over five years.

    One of the strengths of Roseby is its simple metallurgy which has potential for recovery of native and oxide copper using inexpensive gravity and flotation techniques. This is the key to economic production of the economic production of copper from what is a relatively low grade resource. Production itself is expected to start in the north where there are four deposits and once it has started reserve definition will commence on three deposits in the south which look like being of a slightly higher grade. Just before Christmas Bolnisis announced some outstanding drilling results at the Blackard deposit which will be the first to be exploited. Significant above average widths and grades of native copper mineralisation were intersected over a strike length of 2,000 metres. The Blackard deposit is over 2,000 metres long, up to 500 metres wide, and remains open to the north where one hole intersected 34 metres grading 1.19% Cu from 42 metres, and at depth along the western side of the deposit. Native copper mineralisation has been intersected up to 243 metres below surface where there is a trend towards higher grades at depth. Recent drilling also intersected significant near surface malachite (copper carbonate) mineralisation. This is not included in the current resource estimate and, if included in future resource estimates, would significantly increase the size of the Blackard deposit. A new resource estimate can be expected later this month.

    In the meantime gold production in Georgia has been hit by an early start to winter, but overall production for the year is still expected to be around 80,000 ounces of gold. On this basis Bolnisi's overall production should rise from an attributable level of 40,000 ounces in the year to end June 2003 to around 80,000 ounces in 2004 and over 100,000 ounces plus 15,000 tonnes of copper by June 2005. This is quite a transformation and investors are only waking up to it slowly.

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