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Bass Metals

Leading the operational/exploration charge in Tasmania Bass Metals epitomizes Tasmanian mining’s good news story

The summation of the 2011 Tasmanian Minerals Council/Mineral Resources Tasmania Conference is a positive one, with a general consensus that the outlook is good for this blooming, healthy sector.

Demand for minerals remains high, as does the number of exploration licenses granted in the region—reaching an all-time peak in the last three months of 2010. Its polymetallic opportunities have long been internationally appreciated, triggering strong competition for the best real estate and some great growth stories for the coming year—not least that of Perth-headquartered Bass Metals Limited, the diverse operator/explorer with some of the best volcanogenic massive sulfide (VMS) polymetallic ground around.

“We are in production, getting about a third of our revenue from gold and silver and two-thirds from base metals—diverse revenue streams, excellent potential for new discoveries and to bring a project onstream which would make 80,000 to 100,000 ounces of gold for seven to eight years,” Mike Rosenstreich, Managing Director, tells AuBJ.

“We’ve had two mining operations in progress and we’re looking to expand our production base—it’s been a very significant growth profile.”

Speaking at the Tasmania conference, Rosenstreich outlined three next steps for Bass Metals: Step 1, the company’s Hellyer Mine Project (“HMP”); Step 2, a focus on exploration upside, and Step 3, growth from existing resources.

Entering the province and growing the HMP

Spurred on by the technical curiosity of its Chairman, Don Boyer, Bass eyed this geological province, and the many mineral deposits located along it, before embracing an opportunity to secure an advanced project within the Mount Read belt Volcanic Belt in late 2004/early 2005. Having secured this lead project, the company became involved in a large ground position of prospective targets—through joint venture agreements mainly.

“We had no resources on any of our properties when we acquired them, and now five or six years later we have very significant mineral resources,” Rosenstreich says.

Not least the Fossey ore reserve, which Bass discovered in 2010. With just over one million tonnes of ore with significant copper, lead, silver and gold, Fossey makes up the start of the HMP—the company’s core of operations today.

“We see HMP as a five year project, with the first two years coming from the Fossey ore reserve and the other three from resources at Fossey East, Hellyer and Que River,” Rosenstreich says, outlining other operational and exploration areas of focus.

“The scale of production at around 500,000 tonnes of ore per year means we would be producing approximately 50,000 to 55,000 tonnes of zinc concentrate, 27,000 tonnes of lead con and 5,000 tonnes of a copper-precious metals concentrate each year. Our target is to maintain that production rate.”

Forecast revenues stand at approximately $30 million to $40 million in earnings before tax and interest, on a per annum basis, subject to metals prices. As a result, Rosenstreich says, Bass will be in the region of 12 to 15 cents a pound of payable zinc—a low cost profile in relation to peers. The company remains mindful of the challenges it faces within HMP—including high water flows and operating its large, modern mill on a campaign basis—and continues to devote great effort to problem solving these technical challenges. Having recently completed its third milling campaign—its largest to date—Bass will commence its fourth on May 23—planned to be bigger again. The copper-precious metals concentrate is doing well and zinc is getting up to the company’s planned recoveries, Rosenstreich says, and work continues on improving lead recoveries, where modifications have just been completed. Simultaneously, the Bass team continues on with the Hellyer Tailings gold resource and a range of exploration activities.

Steps two and three—building on HMP

In the Hellyer Tailings resource, Rosenstreich says, the company aims to treat a 1.5 million ounce gold equivalent, making it a very valuable above ground resource.

“Some people turn their noses up at tailings, but these, I’d suggest, are quite low resource risk as they’re relatively recent—1998 to 2000—and people understand what’s gone into them and their metallurgical properties,” he says.

“There has also been very detailed test work done in the 1990’s to be able to recover the gold from this refractory material. It’s that work that we’ve based our scoping study numbers.”

These operational costs outlined look economical, and by harnessing pressure oxidation, Rosenstreich says, the company’s recent work shows that it will be possible to get significantly better gold recovery, likely silver too, than those numbers that are already favourable.

“The positive thing about pressure oxidation is it’s a robust, proven technology. There also appears to have been technological advances since the 1990’s that will enhance the recovery of gold and silver, and we’re also able to recover lead and zinc through the process, and the tailings have an appreciable lead and zinc credit in them,” he says.

“It’s a work in progress, but the follow-on from that is it’s emerging as the preferred technology.”
On the exploration front, he says, Bass’s story essentially has two parts, beginning with how successful the company has been in its undertakings to date—embarking on the property with nothing, then swiftly going about building a significant resource inventory.

“Secondly, we found a significant ore body within 150 metres of the old Hellyer mine. That says something about where the previous explorers were looking and where we made this discovery. It opens up the potential for the whole reef area,” he says.

“[We have] a track record on exploration success, new areas to target not previously found, and a neighbourhood that is a world class VMS area.”

Bass is braced to announce, commence and progress on a number of fronts in line with its five-year mine plan for HMP within the coming months, beginning with its ramp up through the September quarter, near-complete grade drilling, ongoing mill modifications and in exploration and gold tails where test work program results are on the way.

The best from Bass is yet to come

Breaking down the work to come between production and exploration, Rosenstreich earmarks the next steps we ought to look out for in 2011.

“From a production sense, to hit our name plate production runs through the September quarter, to look for a revised ore reserve following the completion of our infill drilling, and also to look for resource upgrades from the Fossey East discovery where we’ll start drilling underground again in a few weeks’ time,” he says.

“With respect to exploration, people should be looking out for heightened activity, hopefully some new discoveries, and certainly growing resources and generating new targets. They should also look for our gold discovery making significant advances as we do plan to have that feasibility study completed early next year.”

Over the coming month, Bass will receive all of the test work for which it has recently provided interim updates, providing a more complete view of progress made. Contemplating quite how much the miner has achieved in this highly prospective region—coming from a blank sheet when it entered the province some six-or-so years ago to building an ever-growing operational and exploration landscape—it is clear why feedback from the Tasmanian conference has been so optimistic, and it is companies like Bass that are leading the charge for the health of the region’s future mining industry.

With exemplary expertise, meticulous planning and success across a range of mineral brackets, the company has already impressed. With the results streaming in, the group is sure to continue to do so, emerging as one of Tasmania’s most exciting growth profiles to watch in the years to come.