Bullseye Company Update

Transcription

1 Bullseye Company Update FUNDING SECURED AND STRONG PROGRESS TOWARDS GOLD PRODUCTION 23 March 2015: The Board of Bullseye Mining Limited ( Bullseye or the Company ) is pleased to provide the following update on strong recent progress made by the Company: Successful capital raising with in excess of A$4 million funding commitments received. Drilling contractor now engaged to commence targeted next stage drilling at the North Laverton Gold Project. Drilling to potentially increase the size of the Bungarra open pit Gold mine. Additional drilling to target the known mineralised Boundary and Stirling Gold deposits. Strong progress made on mining approvals for the North Laverton Gold Project. Improved Gold price (in Australian Dollar terms) increases the projected revenue from the currently defined Bungarra project from A$77 million to A$82 million and project NPV from A$32 million to A$37 million. Recent surface rock chip samples from the North Laverton Gold Project area assayed at and grams per tonne Gold. Further investment opportunity for existing shareholders. SUCCESSFUL CAPITAL RAISING AND NEXT STAGE DRILLING TO COMMENCE The Board of Bullseye is pleased to advise that the Company has recently received funding commitments in excess of A$4 million. This funding commitment now enables the next stages of planned drilling and further works towards mining to proceed at the Company s North Laverton Gold Project. Commenting on the recent successful fund raising, Bullseye Chairman Peter J Burns stated, Despite continued tough market conditions, we are delighted to have secured our next stages of funding for Bullseye and we believe this funding represents a strong endorsement of the outstanding potential of our North Laverton Gold Project and our clear development pathway for Bullseye to generate strong cash flow and become a profitable Gold producer. The Board intends to raise a further A$2 million at A$0.16 per share, to fund the Company s ongoing development, with a particular emphasis focussing on Gold production from the North Laverton Gold Project. Priority under this share offer will be given to all existing Bullseye shareholders who wish to invest further in the Company. Additional details on the proposed investment offer are outlined further in this Company Update.

2 OVERVIEW OF UPCOMING PLANNED DRILL PROGRAM Bullseye has now received all approvals from the West Australian Department of Mines and Petroleum to proceed with the next stage targeted drilling program at the Company s North Laverton Gold Project. The recent securing of the funding commitments enables the Company to now proceed with its planned drill program which is scheduled to commence in late March The next stage drilling works will focus on well targeted areas of known existing Gold mineralisation within the North Laverton Gold Project area. The key objectives of the upcoming drill program will be to increase Bullseye s total mineable Gold ounces, potentially across up to three deposits, as well as increase the overall Life of Mine and Net Present Value (NPV) of the North Laverton Gold Project - ultimately increasing the overall valuation of the Company. The Company is currently targeting a Life of Mine for the North Laverton Gold Project area of approximately 4-5+ years which will then enable the Company to progress planned liquidity options for shareholders. North Laverton Gold Project KM Boundary Stirling 3 4 Bungarra The North Laverton Gold Project currently consists of 8 known Gold deposits which all sit within a 15 Kilometre radius of each other (see Figure 1). The project offers outstanding potential to develop all 8 deposits (and any additional future Gold discoveries in the region), as a significant centralised mining centre over the medium to long term. The Company s focus in the short term is to concentrate on developing a Gold production centre primarily targeting the known deposits of: Bungarra, Stirling, Boundary and Hurleys, which all lie within a 4 Kilometre radius of each other (see Figure 2 below). Figure 1 Bullseye Tenements North Laverton Gold Project Drilling at the Bungarra Deposit As announced by the Company in updates dated 10 th November 2014 and 19 th December 2014, Bullseye has successfully delineated a minable open pit at the Bungarra Gold deposit. The first stage of the upcoming drill program will involve drilling deeper within the Bungarra deposit to potentially extend the minable depth of the open pit from approximately 80 vertical metres to approximately 120 vertical metres. 2 Boundary Stirling 3 4 KM Figure 2 4 Bungarra 1

3 Drilling at the Bungarra Deposit (continued) The Gold mineralisation at the Bungarra deposit consists of a well-defined horizontal flat lying Gold ore body, with three lesser defined vertically oriented ore shoots (see Figure 3). Bungarra Gold Deposit North Laverton Gold Project Figure 3: Gold mineralisation at the Bungarra deposit, showing the well defined horizontal ore body (Gold colour) and the three vertically oriented ore shoots (Purple and Green). The upcoming drilling program plans to target the top areas of the three currently lesser defined vertically oriented ore shoots at Bungarra to potentially increase the depth of the proposed open pit to approximately 120 vertical metres. The Black coloured line in Figure 4 below shows an approximate outline of the current proposed Bungarra open pit following the outcomes of the Bungarra concept mining feasibility study which was detailed in the company update dated 10 th November The Red coloured line in Figure 4 below shows an approximate outline of the proposed open pit assuming successful further drilling, resource estimation and mining feasibility studies, which could potentially allow the proposed Bungarra open pit to be mined down by an additional depth of approximately 40 vertical metres. Bungarra Gold Deposit North Laverton Gold Project Figure 4: Approximate outline of current proposed Bungarra open pit (Black line) and proposed Bungarra open pit assuming successful further drilling (Red Line).

4 Drilling at the Boundary Deposit The Boundary deposit is the second deposit within the North Laverton Gold Project which is planned to be drilled in the upcoming drill program. The Boundary deposit has had significant historical works undertaken on the project area. The Boundary deposit hosts a current JORC Gold Resource of approximately 250,000 ounces (across all resource categories) and spans a large Gold mineralised area, over 700 metres in length. The Boundary deposit has numerous historic drill holes with very encouraging results, indicating strong potential to develop a second open pit Gold mine within the North Laverton Gold Project area. A summary of some of the encouraging historic drill holes at the Boundary deposit (some of which were previously reported in the Company Update dated 11 th November 2013) are as follows: BOUNDARY DEPOSIT Hole ID Depth From Depth To (<160m) Significant Intercept grams per tonne Gold) BOUNDARY DEPOSIT Hole ID Depth From Depth To (<180m) Significant Intercept grams per tonne Gold) BDRC BDRC BDRC BDRC BDRC BDRC BDRC BDRC BFRC BDRC BDRC035 (inc) BDRC035 (inc) BDRC BDRC BDRC BDRC058 (inc) BDRC058 (inc) BDRC058 (inc) BDRC BDRC060 (inc) BDRC060 (inc) BDRC BDRC061 (inc) BDRC061 (inc) BDRC061 (inc) The upcoming drill program will primarily target Gold mineralisation to a depth of approximately 120 vertical metres, with the aim to prove up a second mineable open pit to complement the planned production from the Bungarra open pit mine. Drilling at the Stirling Deposit The Stirling deposit is the third deposit within the North Laverton Gold Project which is planned to be drilled in the upcoming drill program. The Stirling deposit hosts a current JORC Gold Resource of approximately 17,000 ounces (across all resource categories). The Stirling deposit is not expected to be as large as the Bungarra and Boundary deposits, however historic drilling indicates that Gold mineralisation is as shallow as within 2 metres of the surface, which offers excellent potential to develop a third and potentially low cost open pit Gold mine which will complement the production costs of both Bungarra and Boundary, whilst also contributing additional Gold production ounces to potentially increase the overall Life of Mine of the North Laverton Gold Project.

5 Should further commercially viable open pits be proven from the upcoming drill program at the North Laverton Gold Project, this could then have a significant positive influence on the overall economics of Bullseye s mining activities in the area. Mining of more than one open pit operation concurrently can potentially offer attractive cost saving benefits to the overall project by sharing the fixed costs of the project over a number of open pit operations. STRONG PROGRESS ON MINING APPROVALS The Company has engaged consultants in all relevant disciplines to progress mining approvals for the initial target areas of the North Laverton Gold Project. The Company has now completed extensive environmental surveys on the proposed mining area, with extensive Flora and Fauna reports now virtually complete which have not identified any major areas of concern for the project. Works on all other key areas of the mining approvals process are actively progressing and further updates will be provided in due course. IMPROVED BUNGARRA PROJECT ECONOMICS The key outcomes of the concept mining feasibility study undertaken on Bullseye s Bungarra Gold Project, as announced by the Company on 10 th November 2014, were based on a Gold price of AUD$1,400 per ounce. Since the original Bungarra concept mining feasibility study was undertaken, the Gold price in Australian Dollar terms has risen and is currently at AUD$1,500+ per ounce, as at the date of this update. The increase in the Gold price from AUD$1,400 to AUD$1,500+ provides an increase in the projected revenue from the Bungarra project from approximately AUD$77 million to AUD$82 million and also increases the projected NPV of the project from approximately AUD$32 million to AUD$37 million. The sharp drop in the oil price recently is also believed to have a material reduction in the proposed operating costs of the Bungarra Gold mine, further improving the potential profitability of the project, however such cost reductions have not been factored into the project economics at this stage. The table below summarises the Revenue and NPV comparison at a Gold price of AUD$1,400 and AUD$1,500: Bungarra Concept Mining Study - Key Outcomes Assumed Gold Price AUD$1,400 AUD$1,500 Contained Indicated Resource (Gold Ounces) 63,202 63,202 Mined Ore Grade (Grams per tonne Gold) Recovered Gold (Gold Ounces) 54,878 54,878 Capital Cost to Production AUD$ 5-7 million AUD$ 5-7 million Total Revenue AUD$ 76,829,200 AUD$ 82,317,000 Total Costs (no capital or govt royalty) AUD$ 39,080,348 AUD$ 39,080,348 Cash Cost Per Ounce (no capital or royalty) AUD$ 712 AUD$ 712 Cash Cost Per Ounce (inc capital & royalty) AUD$ 855 AUD$ 855 Net Present Value (pre-tax, no capital or royalty) AUD$ 37,748,852 AUD$ 43,236,652 State Government Royalty (2.5%) AUD$ 1,920,730 AUD$ 2,057,925 Contingency (10%) AUD$ 3,908,035 AUD$ 3,908,035 Net Present Value (pre-tax, excluding capital) AUD$ 31,920,087 AUD$ 37,270,692

6 SIGNIFICANT FURTHER UPSIDE OF NORTH LAVERTON GOLD PROJECT The Board of Bullseye are extremely encouraged by the progress of the North Laverton Gold Project and the strong potential of the upcoming drill program to deliver further viable open pits within the project area. By the end of the upcoming drill program, the Company will still have only targeted three of the potential eight known Gold ore bodies within the project area. In addition to the eight known Gold ore bodies, Bullseye also holds approximately 400km 2 of tenements in this region, on the highly prospective Dingo Range Greenstone belt, offering significant further exploration upside and the ability to potentially discover further Gold deposits and develop a long life of mine for the project. A good example of the outstanding potential for further development within the project area is the results of a number of rock chip samples recently taken from the surface at another of the eight known deposits which is yet to be developed by the Company. The highest results of the recent surface rock chip samples include: grams per tonne Gold, grams per tonne Gold, grams per tonne Gold, grams per tonne Gold and grams per tonne Gold. INVESTMENT OPPORTUNITY As outlined at the beginning of this company update, The Board intends to raise a further A$2 million at A$0.16 per share, to fund the Company s ongoing development, with a particular emphasis focussing on Gold production from the North Laverton Gold Project. Priority under this share offer will be given to all existing Bullseye shareholders who wish to invest further in the Company. Any shareholders wishing to invest further in the Company can contact either Peter G Burns or Peter J Burns on the contact details provided below. Please note that this Bullseye Company Update, dated 23 March 2015 does not constitute an offer of securities in the Company. Those who wish to subscribe for further shares in Bullseye must contact the Company directly to receive appropriate share subscription documentation. For further information and investor enquiries, please contact: Peter G Burns Peter J Burns peter.burns@bullseyemining.com.au peter@bullseyemining.com.au Mobile: Mobile: