BMG says maiden 518koz resource at Abercromby Gold Project just the beginning

Few companies could pull together half-million-ounce gold resource over just three drilling campaigns. Even fewer could do it on a shoestring budget of a little over $4 million.

This week BMG Resources (ASX: BMG) delivered just that at the Capital deposit, part of its wholly-owned Abercromby gold project near Wiluna in WA, reporting a maiden Mineral Resource Estimate of 11.12Mt at 1.45g/t of gold for 518,000 ounces – at a discovery cost of just $8.35 an ounce.

With a market capitalisation of less than $5 million before the maiden resource was announced, an investor pile-in was inevitable. BMG’s tightly held shares soared 60% on Monday to a six-month high of 1.9c on the news, on big volume, and last traded at 1.6c on Thursday to deliver investors a 33% capital gain on the back of the resource news.

The Bruce McCracken-led explorer said the MRE was just the beginning at Abercromby and yesterday started the process of rattling the tin for more exploration funds. Placing BMG’s stock in a trading halt while a capital raising is carried out, the company will be hoping the tin fills up fast. Expect news by Wednesday.

In other news:

• Core reports 62% increase to Finniss MRE, potential LOM extensions
• ChemX drill campaign hits significant manganese
• MinRes launches Onslow Iron’s first transhipper

BMG will return to Abercromby in due course to build on its success with the drill bit and kick off development studies ahead of determining options for a potential mining operation.

The Capital deposit sits in the northern third of the Abercromby project tenement on 1.3km of strike that remains open in multiple directions and at depth. Immediately to the south of Capital, BMG has identified a pipeline of regional targets that delivered strong results from first and second-pass aircore in 2022, hinting at Capital-style repetitions.

And, when it comes to monetising a project, the savvy investor knows that location is often as important as the resource quality.

Abercromby sits on 12km² of granted mining lease in the Wiluna-Agnew greenstone belt – elephant country with a rich history of gold mining and well-understood ground – think Wiluna, Jundee, Bellevue, Agnew and Bronzewing to name a few.

And it is hemmed by gold mills and infrastructure that would greatly lower the barriers to potential production.

Mr McCracken said the maiden MRE was a step change for the company, shifting it from pure explorer to potential developer with a large resource base and huge potential for further growth.

“Abercromby now has a metric for valuation that BMG can use to quantitatively demonstrate to the market its success in leveraging value from the drill bit,” he said.

“Abercromby is well located for development. The potential to monetise the project in a rapidly appreciating gold price environment, underpinned by this maiden resource for the Capital Deposit, places BMG in an enviable position as we continue to pursue sustained, long-term shareholder value.”

Investors, always on the lookout for the next generation of gold mines, are paying close attention.