Quarterly Report for Shareholders Period Ending 30 June 2011

Transcription

1 Quarterly Report for Shareholders Period Ending 30 June 2011 ASX Code: BDR Directors: Craig Readhead Mike Donaldson Jim Jewell Peter Bowler Robert Watkins Greg Barrett Corporate Details: Non-Exec. Chairman Non-Exec. Director Non-Exec. Director Managing Director Exec. Director Geology CFO / Company Sec. Cash at Bank 30 June 2011: $49 M Issued capital: 657,906,946 ordinary shares ABN Head Office: Level 2, 16 Ord Street West Perth 6005 PO Box 542 West Perth 6872 Tel: Fax: For further details: Peter Bowler Tel: peter.bowler@beadellresources.com.au Greg Barrett Tel: greg.barrett@beadellresources.com.au Peter Bowler Managing Director HIGHLIGHTS CORPORATE Available Funds The Company had cash at bank of ~ $49 million with no bank debt. Project Finance A very competitive process to select the project lender continued during the quarter with the decision to award the loan facility being imminent. TUCANO GOLD MINE Definitive Feasibility Study Completed The DFS is now completed and the Board has made the decision to commence mining at Tucano. Tucano CIL Plant Construction Ausenco Limited was awarded the EPCM contract for the construction of the Tucano CIL plant. Mining Commences at Tucano Mining commenced in June at Tucano with 183,000 t of material being moved. Tapereba Sul Discovery - New high grade gold shoot discovered at Tapereba Sul with results of 6 14 g/t gold and g/t gold. Tapereba AB1 Results - Maiden RC grade control drilling intersected up g/t gold from 14 m. Tapereba AB2 Results - New drill results from Tapereba AB2 including g/t gold and g/t gold. Iron Ore Results - Exceptional iron ore results including % iron, % iron, % iron from surface. AUSTRALIA EXPLORATION Tropicana East Atlantis - RC drilling has defined a greater than 2 km strike of high grade gold mineralisation including g/t gold, g/t gold and g/t gold. Tropicana East Hercules Discovery - A new zone of gold mineralisation discovered 5 km north of Atlantis. Results from a single RC hole intersected g/t gold from 50 m..

2 TUCANO GOLD PROJET (100%) Feasibility Study The definitive feasibility study was completed during the quarter indicating that the Tucano project has a robust financial outcome. Tenders for the civil contract were issued in June 2011 and closed on the 5 th July Award of this contract is now complete with contractor mobilisation expected by mid August Approvals On 4 th May 2011 the State Government environmental Operating Licence (LO) was approved. There is no further impediment to the commencement of mining and the construction of the CIL plant at Tucano. EPCM On 30 th May 2011 Ausenco Limited were awarded the EPCM (Engineering, Procurement, Construction and Management) contract for the Tucano CIL processing plant and related infrastructure. Work is well advanced with respect to the detailed Engineering (60% complete) and the purchase of the long lead equipment items. Overall procurement was 80% complete and removal of the spent ore in the location of the SAG mill, Crusher and CIL tanks was complete at the end of the period. Plant Site ready for Crusher, Sag Mill and CIL Tank Placement. Mining Mining commenced in the Tap D3 and D2 pits shortly after the approval of the environmental license (LO). Some 183,000 tonnes of material was mined in June, of which 4,770 tonnes were ore. The ore having been sourced from the upper portion of the Tap D3 pit. The Tap D3/D2 pits are the location of the first tailings disposal at Tucano with mining required to be complete by the end of Qtr 1 of The current schedule indicates that mining progress is on target to achieving this. Preparations to commence mining were also undertaken in the Tap AB and Tap C pits during the period. Beadell s 7MW Sag Mill Pinion Drive. Mining of Tapereba D2 in full swing. JUNE 2011 QUARTER REPORT 2

3 Resource Development Four diamond rigs and one RC rig, all operating on double shift, continue to aggressivlely expand the resource base with over 12,000 m of drilling completed in the quarter. Over the next two years the planned drilling programs are designed to target a 3 Moz addition to the current 4.3 Moz resource (1) In line with realising the resource potential of the Tucano system, Beadell secured a T685 track mounted Schramm RC rig which will be imported into Brazil at the end of this year. During the quarter, outstanding drill results continue to be received from the 3 main deposits Tapereba AB, Tapereba C and Urucum along the 7 km long Tucano Trend. An exciting new high grade lode has been discovered along the southern continuation of the main Tucano trend at Tapereba Sul where outstanding results of g/t gold and g/t gold were received. Tapereba Sul A change in focus to extending the current 4.3 Moz resource has immediately been successful in locating a high grade gold lode continuation of the main Tapereba AB zone to the south in an area called Taperaba Sul. The result of g/t gold from 100 m including g/t gold from 103 m in FD1177 is located along the main sheared contact between Banded Iron Formation to the west separating a clastic unit to the east (Figure 1 & 2). This result is especially significant as it is interpreted to represent a 400 m step out of the main Tapereba AB1 southeast extension where a previously announced result in FD1301 of g/t gold from 152 m was intersected. The new zone in FD1177 has the same deep weathering trough profile seen in the high grade Trough Zone at Tapereba AB2 and the southeast extension of Tapereba AB1. The result in FD1177 is 100m north of another result received during the quarter of g/t gold from 88 m to bottom of hole in F977. Excellent potential exists to define a significant gold resource at Tapereba Sul and an extensive drilling program is underway. Figure 1. Tucano Gold and Iron Ore Results Plan JUNE 2011 QUARTER REPORT 3

4 Figure 2. Tapereba Sul Drill Section 93300N. Tapereba AB2 Ongoing diamond drilling of the high grade Tapereba AB2 Trough Zone has intersected further significant results during the quarter, including g/t gold from m to bottom of hole in FD1120 and g/t gold from 137 m including g/t gold from 142 m in FD1169. The new results and other recently released results from the trough zone will have a materially positive impact on the measured and indicated resource for Tapereba AB2 once remodelling is completed. Currently the optimised gold pit is bottoming out on high grade gold mineralisation only because the high grade mineralisation beneath the optimised pit is classified as inferred resources and therefore was not included in the pit optimisation. Further drilling to extend the Trough Zone at depth is in progress. Tapereba C Resource delineation and extension drilling continues to intersect significant oxide gold mineralisation at Tapereba C including F1129, g/t gold from surface, F1151, g/t gold from 20 m including 4 incorporated. 16 g/t gold from 22 m, F1184, g/t gold from 8 m, F1123, g/t gold from 29 m and g/t gold from 48 m to BOH. None of the above results have been included in the current resource model for Tapereba C and are expected to have a positive impact once Tapereba C remains the most under-drilled of the three main orebodies along the 7 km long Tucano trend, with the depth of drilling generally limited to less than 100 m below surface. The new drill results will significantly improve the classification of the existing resource, leading to potential increases in the future open pit optimisations and extensions of the resource. Tapereba AB1 Grade control RC drilling of Tapereba AB1 has intersected extremely high grade gold results of up to g/t gold from 14 m including 1 1,877.3 g/t gold from 18 m in GCRC267. Other individual meter results within the intercept include 20.2 g/t, 71.0 g/t, 34.4 g/t, 14.0 g/t and 17.7 g/t gold. The grade control RC drilling is on a 15 m x 7.5 m grid to define the gently west dipping gold lodes of Tapereba AB1. Tucano Regional Exploration A regional exploration team has been assembled and logistical preparations including remote field camp refurbishment is underway. It is expected that regional targets such as Sucuriju will be drilled in the next quarter. JUNE 2011 QUARTER REPORT 4

5 Figure3. 3D View Iron Ore Results and Gold Optimised Pit looking North West. Tucano Iron Ore Numerous new iron ore results were received during the quarter highlighting the excellent grade and magnitude of the itabirite iron ore and proximity of the iron to the gold mineralisation. More significant results include % iron from surface in FD184, % iron from surface in FD950 and % iron from surface in FD943 (Figure 1 & 3). An extensive campaign of diamond drilling and diamond drill hole re-sampling comprising over 500 holes to date has been completed over a 6 km strike length of the Tapereba trend (Figure 1). The drill hole sampling has been in-filled to a nominal 50 m spacing throughout the main gold pit areas. The significant iron ore results have the potential to dramatically alter the fundamental economics of the Tucano project due to the close spatial relationship of the gold and iron ores. The effect of offsetting economic contributions from gold and iron in a single open pit by vastly reducing waste stripping costs will drive future pit optimisations materially deeper. At Tapereba AB1, the eastern high wall of the gold pit returned a result of % iron from surface. The continuation of this zone to the south shows good continuity of iron ore with a result in Tapereba Sul of % iron from surface also in close proximity to the exceptional gold results announced from this area. At Tapereba AB, high grade iron ore also strikes through the western half of the gold optimised pit. New results from the western zone include % iron from surface in FD250 and % iron from surface in FD943. The iron ore continues to the north and within and adjacent to the Tapereba C gold optimised pit, exceptional iron results include % iron from surface in FD344, % iron from surface in FD923 and % iron from surface in FD184. The iron ore results from all the drilling and resampling are currently being incorporated into a maiden resource being completed by independent third party SRK Consulting which will be completed and announced to the market within the next few weeks. Tartaruga Project (100%) Preparations for recommencement of exploration at the Tartaruga project are underway. During the quarter, Beadell was awarded a tender for an adjoining tenement that abuts the northern tenement boundary of the main concession. The northern tenement is known to contain significant gold mineralisation. JUNE 2011 QUARTER REPORT 5

6 WESTERN AUSTRALIA Tropicana East Project (100%) towards ongoing drilling of the Tropicana East project targets under the Exploration Initiative Scheme (EIS). High grade gold mineralisation has been intersected in wide spaced RC drilling over a greater than 2 km strike length at the newly named Atlantis prospect. Results received during the quarter including g/t gold from 51 m in NLC049, g/t gold from 72 m in NLC058 and g/t gold from 35 m in NLC070 (Figure 4). Additionally a new zone of gold mineralisation has been discovered a further 5 km along strike to the northeast at the Hercules prospect where a single RC hole intersected a composite result of g/t gold from 50 m in NLC094 (Figure 4 & 6). Potential for additional gold discoveries along the 15 km long Hercules Shear Zone is considered to be high and follow up drilling programs are currently being planned. In support of this, Beadell has again been awarded two grants totalling $298,750 Figure 4. Hercules Shear Zone Results on Aeromagnetics. Figure 5. Tropicana East Location Plan on Aeromagnetics Atlantis Further significant RC drill results have been received from the newly named Atlantis prospect, including g/t gold from 51 m in NLC049 and g/t gold from 72 m in NLC058. Wide spaced RC drilling on 80 to 160 m spaced sections has delineated a continuous zone of gold mineralisation striking northeast and dipping moderately to the northwest. The mineralisation remains completely open at depth and, in most cases, has only been intersected in a single RC hole on each section in the upper regolith. The mineralisation also remains open to the south where RC hole NLC070 intersected g/t gold from 35 m. Potential for other subparallel or cross cutting mineralised zones is considered to be high including a completely undrilled interpreted shear less than 1 km to the east which wraps around the eastern contact of a magnetic litho unit that hosts the Atlantis mineralisation. JUNE 2011 QUARTER REPORT 6

7 Further drilling is being planned to target potential extensions and high grade plunges of the mineralisation and a diamond drilling program will commence shortly, aiming to define the structural controls and style of the gold mineralisation intersected to date. Hercules The Hercules prospect is located 5 km along strike to the northeast of Atlantis, on the Hercules Shear Zone (HSZ). Recent RC drilling at Hercules, targeting a northwest dip, intersected significant gold mineralisation in a single drill hole. The composite drill result of g/t gold from 50 m in NLC094 is highly encouraging and remains completely open to the south for several kilometres. The closest drill section to the north is 500 m away, however, even this section may have missed the northern extension due to the change in the interpreted dip. Aeromagnetics in this area highlights a complex magnetic pattern reflecting stratigraphy and structure with significant high angle structural intersections of a fold closure type geometry considered a favourable structural setting for gold mineralisation. Occurrences of highly sulphidic altered BIF are also considered to be an excellent potential host rock for gold mineralisation. Follow up drilling is currently being planned. Figure 6. Hercules Drill Section N. West Musgrave Project (100%) Handpump A 3,000 m RC drilling program at Handpump targeting extensions and repetitions of the rhyolite dome hosted gold mineralisation discovered in 2009 was completed during the quarter. Results were generally disappointing with maximum composite results of g/t gold from surface in HPC29 and g/t gold from 65 m in HPC34. The mineralisation remains open east and north of the above holes which were drilled 250 m east and north respectively of the original discovery hole HPC01 which intersected g/t gold. Skirmish Hill Joint Venture Unseasonably long and heavy rains resulted in no field work being completed by Anglo American in the second quarter of calendar Previously reported coincident geochemical and aeromagnetic anomalies are now planned to be screened with a ground Squid EM survey in the third quarter Lake Mackay Joint Venture No work was reported during the quarter. JUNE 2011 QUARTER REPORT 7

8 CORPORATE & FINANCE The Company had cash at bank of $48,863,000 with no bank debt. The Company completed an equity raising to sophisticated and professional investors on 1 July 2011, issuing 35,294,118 shares at $0.85 each for gross proceeds of $30,000,000. All Employee Options expiring on 30 June 2011 were exercised raising $121,250. Several key staff appointments were made during the quarter, including General Manager Tucano and Director of the Group s Brazilian subsidiary, Beadell Brasil Ltda, Silvano Andrade who was previously a General Manager at one of Yamana Gold s operations for 3 years. Rosemberg Araujo has been appointed as Finance Director for Beadell Brasil Ltda in Brazil. Mr Araujo was previously the Finance Director of the company under New Gold s ownership prior to the sale to Beadell in April Most recently, he has held the equivalent position with Rio Novo Gold (a TSX listed gold company operating in Brazil). Following the successful completion of the DFS, the Board officially announced the decision to mine at Tucano. The award of the EPCM contract to Ausenco ensured the continuation of ordering the long lead time items during the quarter, thus leveraging the Company s strong cash position. The first gold pour is targeted for the June 2012 Quarter. A very competitive process to select the project lender continued during the quarter with a decision to award the loan facility being imminent. Competent Persons Statement The information in this report relating to Exploration Results and Mineral Resources and Ore Reserves is based on information compiled by Mr Robert Watkins who is a member of the Australasian Institute of Mining and Metallurgy and has sufficient exploration experience which is relevant to the various styles of mineralisation under consideration 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. Mr Watkins is a full time employee of Beadell Resources Limited. Mr Watkins consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. (1) The potential quantity and grade related to Exploration Targets in this report is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource. JUNE 2011 QUARTER REPORT 8