Breaker Resources NL's (ASX: BRB) Lake Roe Gold Project is a virgin 1.7Moz greenfields discovery in the Kalgoorlie region, one of the world's most prolific and top-ranked mining jurisdiction. Breaker has spent the bulk of the last 4 years drilling out a 9km long mineralised trend with the majority of the work focused on the 3km-long, 1.5Moz Bombora deposit with the aim of establishing an early production option from which to expand the Project.
Breaker Managing Director, Tom Sanders said: 'The underground study is a first step in our analysis of the mining potential below the open pit Resource. The positive outcome starts to highlight the upside of the other high-grade steep, flat and west-dipping lodes outlined over the last 18 months. 'As a result, further underground mining studies are now planned on the other lodes. 'A recently completed open pit study demonstrates potential for a large open pit with strong early free cash flow. We now have the potential to complement this with expanding amounts of highgrade underground feed when the production cost of underground mining is less than that in an open pit. 'It is clear that we have the building blocks for a significant standalone operation that we can keep growing with further drilling
The Company has now completed a preliminary underground mining Study of the Tura lode, one of many high-grade gold lodes discovered below the Bombora open pit area over the last 18 months (Figure 1). This Study only addresses the obvious initial extent of the Tura Lode immediately accessible from the Bombora open pit (Figure 2). The Tura lode is still open along strike, and further underground studies on other high-grade lodes are expected to follow. This Study follows a recent open pit mining study which identified potential for strong early free cash flow from a series of staged cut-backs extending over 3km (ASX Release 12 April 2022). This Study assumes decline access from a conceptual open pit described in ASX Release 12 April 2022 (Shell 74). Underground access is estimated to occur approximately two years after the commencement of the open pit and is expected to be approximately two years in duration (Tura lode alone).
Cautionary Statements
The Scoping Study (Study) referred to in this ASX announcement is conceptual in nature. It is a preliminary technical study to assist in assessing the potential viability of an underground mining operation accessed from a conceptual open pit discussed in ASX Release 12 April 2022. The Study is based on a JORC compliant Mineral Resource Estimate (MRE) for the Bombora gold deposit (ASX release 20 December 2021). The MRE underpinning the Study has been prepared by a Competent Person in accordance with the requirements of the JORC Code (2012). All material assumptions and technical parameters underpinning the MRE continue to apply and have not materially changed. A Competent Person's Statement is found below in this announcement. The Study is based on low level technical and economic assessments that are not sufficient to support the estimation of Ore Reserves. The outcomes presented here should not be considered as any more than providing preliminary guidance on the potential economics of underground mining at the Lake Roe Project for planning purposes. Further exploration and evaluation work and appropriate studies are required before Breaker will be in a position to estimate any Ore Reserves or to provide any assurance of an economic development case. As such, no Ore Reserve has been declared the Study findings are subject to market and operating conditions. The Study is based on the material assumptions outlined in this report. While Breaker considers all of the material assumptions to be based on reasonable grounds, there is no certainty that they will prove to be correct or that the range of outcomes indicated by the Study will be achieved. The Study does not account for the capital costs of a processing plant or other pre-mining capital and infrastructure works and makes no allowance for working capital some of which may or may not be available from open pit mining activities undertaken prior to underground mining. The Study assumes underground access approximately two years after the start of a conceptual open pit shell 74 which contains approximately 85% in Indicated Resource potentially available for open pit mining (ASX Release 12 April 2022). Given this, the Company is satisfied that the Inferred Resource component of the underground Production Target is not the determining factor in the overall viability of the project when early mining of the 12 April 2022 Production target is taken into consideration. Approximately 88% of the Production Target in the current Study is based on Inferred Resources. Investors are cautioned that there is a low level of geological confidence in Inferred Resources and there is no certainty that further drilling will result in the determination of Measured or Indicated Resources or that the Production Target will be realised. The stated production target is based on Breaker's current expectations of future events and should not be solely relied upon by investors when making investment decisions. Further evaluation work and appropriate studies are required to establish sufficient confidence that this target will be met. The Study is based on material assumptions and other relevant factors estimated by a Competent Person to have an accuracy range of approximately +/-35%. Breaker has concluded it has a reasonable basis for providing the forward-looking statements included in this announcement. Whilst best efforts are taken to ensure that input parameters are realistic and achievable they remain subject to ongoing review. They are not intended to purport a forecast of any financial nature at this time. While each of the Modifying Factors in the JORC code were considered and applied, there is no certainty of eventual conversion to Ore Reserves or that the underground Production Target will be realised. This document contains contextual information current as at the date of this announcement. This document provides a summary of the Study and does not purport to be all-inclusive or complete. Project development assumes the completion of a Definitive Feasibility Study. There is no certainty that the Company will be able to source the required development funding if and when required. The Company considers that there is a reasonable expectation that a project of this scale will be able to be funded with a combination of debt and equity at the appropriate time. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of the Company shares. It is also possible that Breaker could pursue other 'value realisation' strategies such as a sale, partial sale or joint venture of the project. If it does, this could materially reduce the Company's proportionate ownership of the project. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Study.
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Tom Sanders BSc (Geology); MSc (Mineral Economics); MAusIMM; FAICD. Mr Sanders is an officer of Breaker Resources NL and his services have been engaged by Breaker on an 80% of full time basis; he is also a shareholder in the Company. Mr Sanders has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Sanders consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Forward-Looking Statements
This ASX announcement contains a series of forward-looking statements. The words 'expect', 'potential', 'intend', 'estimate' and similar expressions identify forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties that may cause the actual results, performance or achievements to differ materially from those expressed or implied in any of the forward-looking statements in this report and are not a guarantee of future performance. Statements in this release regarding Breaker's business or proposed business, which are not historical facts, are forward-looking statements that involve risks and uncertainties. These include Mineral Resource Estimates, metal prices, capital and mine production costs, changes in project parameters as plans continue to be evaluated, the continued availability of capital, general economic, market or business conditions, and statements that describe the future plans, objectives or goals of the Company, including words to the effect that Breaker or its management expects a stated condition or result to occur. Forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by Breaker, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements. Investors are cautioned not to place undue reliance on forward-looking statements.
The Company has concluded that it has a reasonable basis for providing these forward-looking statements and the forecast financial information included in this ASX announcement and accompanying Study. This includes a reasonable basis to expect that it will be able to fund the development of the Lake Roe Gold Project contingent on successful delivery of key development milestones including completion of a positive Definitive Feasibility Study. The detailed reasons for these conclusions are outlined throughout the ASX announcement and accompanying Study.
Contact:
Investors/Shareholders Media
Tom Sanders
Paul Armstrong
Nicholas Read
Tel: +61 8 9226 3666
Read Corporate
Email: breaker@breakerresources.com.au
Tel: +61 8 9388 1474
BRER RESO