3 November 2014
Manager of Company Announcements
Australian Securities Exchange
Level 6, 20 Bridge Street
Sydney NSW 2000
By E-Lodgement
Quarterly Report for the Period Ending 30 September 2014
The Board of Black Mountain Resources Limited ("Black Mountain" or the "Company"),
the silver focused development company with interests in the US, provides
the following commentary regarding its activities during the three months ended
30 September 2014 and the Appendix 5B (Quarterly Cash Flow Report).
A full pdf version of the below announcement, including images, is available
from the Company's website.
Operations
The Company continued its focus on exploration and development at the New
Departure Silver Project in Montana, USA during the period. Importantly, the
work undertaken, in line with Black Mountain's on-going strategy to complete
its 3-D mine model ahead of production upon securing financing, re-emphasised
the high grade nature of the mineralisation at the project.
During the period, the Company's technical teams undertook two phases of
channel sampling, the first of which delivered results in July 2014.
Approximately 118 channel samples were taken and grades of up to 422 oz/t of
silver over 1.9m were returned. These high grade results surpassed the
Company's expectations and were far beyond those previously received from
historical work. While re-emphasising the future production profile of this
project, these results also highlighted that the Blue Dot level has the
greatest potential for hosting a mineral resource in the downward and northwest
plunging remainder of the ore body, as well as confirming existing historical
results.
The second round of sampling commenced in August and the results were reported
in September 2014. These results, which were also ahead of management's
expectations with over 90 oz/t Ag reported over 0.5-2m channels, confirmed the
run of mine grade, extended the silver mineralisation at the Main Zone, and
provided the Company with key production assumptions.
Following the completion of this programme, Hard Rock Consulting ('HRC')
commenced modelling of the silver vein mineralisation to confirm historical
resource estimates and to update the mine plan for New Departure. HRC is also
incorporating zinc and lead as saleable products from the New Departure Mine.
The Company now plans to commence a third and final round of underground
sampling prior to the commencement of mining.
Highlights of the channel sampling results are set out below. Note that silver
results are given in ounces per ton ("opt") and length in meters. Full details
of the sampling results were announced on 22 July 2014 and 18 September 2014.
The Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market
announcements. The Company confirms that the form and context in which the
Competent Person's findings are presented have not been materially modified
from the original market announcements.
Area Sample # Ag Opt Sample length
(m)
Silver Springs 14614 422.6 1.9
Silver Springs 14618 137.9 0.5
Stinker Decline 14601 132.1 1.4
Stinker Decline 14609 117.0 0.9
Blue Dot Level 14521 98.7 0.9
Blue Dot Level 14503 63.7 0.3
Stinker Decline 14605 34.1 1.9
Silver Springs 14615 33.1 1.9
Blue Dot Level 14542 25.0 0.9
Stinker Decline 14610 19.0 2.5
Silver Springs 14621 18.7 0.3
Stinker Decline 14608 17.0 0.6
Blue Dot Level 14541 15.7 0.9
Blue Dot Level 14547 14.3 1.6
Stinker Decline 14613 11.2 1.3
Blue Dot Level 14543 10.9 0.9
Silver Springs 14616 10.1 0.9
Blue Dot Level 14538 8.5 1.3
Blue Dot Level 14504 6.2 0.9
Silver Springs 14617 4.5 0.9
Blue Dot Level 14506 3.9 1.3
Blue Dot Level 14511 3.7 1.3
Stinker Decline 14604 3.5 1.0
Blue Dot Level 14548 3.1 0.9
Stinker Decline 14602 3.0 1.1
Blue Dot Level 14516 3.0 0.9
Blue Dot Level 14627 80.90 0.457
Blue Dot Level 14628 98.20 0.305
Blue Dot Level 14637 11.60 0.457
Blue Dot Level 14639 54.10 0.3048
Blue Dot Level 14648 51.10 0.3048
Blue Dot Level 14649 25.50 0.1016
Blue Dot Level 14799 62.70 0.1524
Table 1 - Highlight of New Departure Sample Results
These samples continue to confirm the high grade nature of the New Departure
silver mineralisation (see map below). The map also shows the silver vein
mineralization confirming the historical resource estimates and helps to
develop a preliminary mine plan for New Departure.
In looking at the most effective method of recommencing mining at New
Departure, management are close to finalising a revised strategy of initially
developing 13,000-15,000 identified tonnes at the upper Coppin Level at a
targeted diluted mining grade of approximately 30 opt before moving to the Blue
Dot Level.
The Coppin Level could be accessed from the existing stinker adit with minor
extensions. The larger portal would give Black Mountain access
to the Coppin zone which is approximately 75m from the mouth of the portal.
Development and mining could be commenced quickly and for a significantly lower
cost when compared to starting at the Blue Dot Level, with ore sale proceeds
from this Coppin zone being used to fund the development of the larger Blue Dot
Level.
With the Company's focus being on the planned mine development and production
activities at New Departure, no significant work was undertaken during the
Quarter at the Conjecture Silver Project or the Tabor Silver and Gold Project.
Corporate
The Board has continued to assess the best financing solution moving forward,
taking into account the current tight equity structure of the Company and tough
market conditions for junior resource companies. Despite the delayed progress
in concluding the most appropriate financing path for New Departure, the Board
is confident that it will be finalised in the coming weeks. At this point,
considering the high grade nature of the mineralisation at the project, and its
low cost production credentials, the Board expects that shareholders will begin
to see the benefits of bringing New Departure into production once suitable
facility is in place.
The Company wishes to note that, as announced on 14 March 2014, whilst Alcyone
Resources Limited remains committed to the previously announced A$3 million
financing in Black Mountain, it can only be in a position to provide the
funding once their own fundraising is completed. Alcyone Resources is currently
suspended on the ASX as it completes its material fundraising transaction.
For and on behalf of the Board
Peter Landau
Executive Director
Appendix 5B Summary - Consolidated Statement of Cashflow
Consolidated statement of cash flows
Cash flows related to operating Current quarter Year to date
activities
$A'000 (3 months)
$A'000
1.1 Receipts from product sales and - -
related debtors
1.2 Payments for - -
(a) exploration, permitting & (225) (225)
evaluation
- -
(b) development & equipment
(110) (110)
(c) production
(d) administration
1.3 Dividends received - -
1.4 Interest and other items of a - -
similar nature received
1.5 Interest and other costs of - -
finance paid
1.6 Income taxes paid - -
1.7 Other Receipts (refunds) 201 201
2.7 Other - -
Net Operating Cash Flows (134) (134)
Cash flows related to investing
activities
1.8 Payment for purchases of: - -
(a)prospects - -
(b)equity investments - -
(c) new project acquisition
1.9 Proceeds from sale of: - -
(a)prospects - -
(b)equity investments 126 126
(c)other fixed assets
1.10 Loans from other entities - -
1.11 Loans repaid by other entities - -
1.12 Proceeds from underwriting - -
Net investing cash flows 126 126
1.13 Total operating and investing - -
cash flows (carried forward)
1.13 Total operating and investing (8) (8)
cash flows (brought forward)
Cash flows related to financing
activities
1.14 Proceeds from raising - -
1.15 Proceeds from sale of forfeited - -
shares
1.16 Proceeds from borrowings 200 200
1.17 Repayment of borrowings (212) (212)
1.18 Dividends paid - -
1.19 Costs associated with issue of - -
shares
Net financing cash flows (12) (12)
Net increase (decrease) in cash (20) (20)
held
1.20 Cash at beginning of quarter/year 62 62
to date
1.21 Exchange rate adjustments to item - -
1.20
1.22 Cash at end of quarter 42 42
For further information please visit www.blackmountainresources.com.au or
contact:
Black Mountain Resources Limited Black Mountain Resources Limited
Peter Landau Melissa Pellicciotti
Executive Chairman Investor Relations
E: peter@blackmountainresources.com.au E: melissa@blackmountainresources.com.au
T: +61 8 9488 5220 T: +61 8 9488 5220
Media (Australia) Media (UK)
PPR St Brides Media & Finance Limited
David Tasker Elisabeth Cowell
T: +61 8 9388 0944 T: +44 207 236 1177
Joint Broker (UK) Joint Broker (UK)
Westhouse Securities Limited Hume Capital Securities Plc
Martin Davison Jon Belliss
T: +44 207 601 6100 T: +44 203 693 1493
Nominated Advisor
RFC Ambrian Limited
Oliver Morse / Trinity McIntyre
T: +61 (8) 9480 2500
About Black Mountain Resources Limited
Black Mountain Resources Limited is a dual listed (ASX | AIM: BMZ) silver and
gold focused development company focussed on the advancement of three highly
prospective previously operating assets located in two of the world's most
developed and proven silver and gold mining regions of Idaho and Montana, USA.
The Company holds a 70% interest in the New Departure Silver Project, the
Conjecture Silver Project and the Tabor Gold and Silver Project pursuant to 45
year leases from Chester Mining Company, Lucky Friday Extension Mining Company
and Brush Prairie Minerals respectively. Black Mountain plans to implement low
cost production and development programmes across all three assets. It is also
implementing exploration programmes to capitalise on the exploration upside
potential apparent across its portfolio.
Black Mountain Resources Limited was incorporated on 29 October 2010 and is
listed on the Australian Securities Exchange (ASX) and London's AIM Market -
trading codes BMZ and BMZO.
Competent Persons Statement
The information included in this release that relates to historical mining data
and exploration results is based on information compiled by Mr. James Baughman,
a technical consultant to the Company. Mr. Baughman is a qualified geologist
and has sufficient experience in exploration and mine development which is
relevant to the style of mineralisation and type of deposit under consideration
and to the activity which he is undertaking 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. Baughman has
reviewed this release and consents to the inclusion in the release of the
matters based on his information in the form and context in which it appears.
Forward Looking Statement
Certain statements made during or in connection with this communication,
including, without limitation, those concerning the economic outlook for the
silver market, expectations regarding silver ore prices, production, cash costs
and other operating results growth prospects and the outlook of the Company's
operations including the likely commencement of commercial operations of the
New Departure and Conjecture Silver Projects, its liquidity and the capital
resources and expenditure, contain or comprise certain forward-looking
statements regarding the Company's development and exploration operations
economic performance and financial condition. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have
been correct. Accordingly, results could differ materially from those set out
in the forward-looking statements as a result of, among other factors, changes
in economic and market conditions, success of business and operating
initiatives, changes in the regulatory environment and other government
actions, fluctuations in silver ore prices and exchange rates and business and
operational risk management. For a discussion of such factors refer to the
Company's most recent annual report and half year report. The Company
undertakes no obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after today's
date or to reflect the occurrence of unanticipated events.
Mining Tenement (Claim) Reference (BLM Serial No.) Interest Held
New Departure Silver Project, Montana US
IM 1- 12 MMC224987 - 224998 70%
IM 14 - 18 MMC225000 - 225004 70%
IM 24 MMC225010 70%
IM 27-30, 32, 34-70 MMC226248 - 226289 70%
MOTHER LODE - 8431 - 70%
DIRECTOR LODE - 5600 - 70%
PROTECTOR LODE - 5601 - 70%
SHIELD LODE - 5602 - 70%
CLIFF LODE - 2264 - 70%
GUARDIAN LODE - 2411 - 70%
QUIEN SABE LODE - 2265 - 70%
SIGNAL LODE - 2505A - 70%
Conjecture Silver Project, Idaho US
SPIDER - SURVEYOR - 70%
GENERAL'S SURVEY #2683
CONJECTURE - SURVEYOR - 70%
GENERAL'S SURVEY #2683
RAINBOW - SURVEYOR - 70%
GENERAL'S SURVEY #2689
COMET - SURVEYOR GENERAL'S - 70%
SURVEY #3071
LUCKY STRIKE - SURVEYOR - 70%
GENERAL'S SURVEY #2744
SILVER CORD - SURVEYOR - 70%
GENERAL'S SURVEY #2744
FEDS #1 - #4 IMC206019 - 206022 70%
FEDCO FR IMC206023 70%
FEDCO #2 IMC206024 70%
NORTHSIDE #1 - #4 IMC206025 - 206028 70%
METEOR #6 IMC206029 70%
METEOR #7 IMC206030 70%
MET #3 - #5 IMC206031 - 206033 70%
UFCO #1 IMC206034 70%
UFCO #2 IMC206035 70%
STAR #4 IMC206036 70%
STAR #5 IMC206037 70%
ROBIN IMC206038 70%
MARS #1 IMC206039 70%
MARS #2 IMC206040 70%
MARS #4 IMC206041 70%
MARS #6 IMC206042 70%
METEOR #1 IMC206043 70%
METEOR #2 IMC206044 70%
METEOR #18 IMC206045 70%
LAKEVIEW 1-81 IMC210780 -210860 70%
LAKEVIEW IMC210780-210783, 70%
1-4,17,29-33,43-47,58-60
IMC210796,
IMC210808-210812,
IMC210822-210826,
IMC210837-210839
CC 1-20 IMC212242-212261 70%
HEWER NO. 2-4 IMC13736-13738 100%
HEWER NO. 5 IMC13739 100%
BUNCO IMC103971 100%
HEWER NO. 1 MILLSITE IMC13743 100%
IDAHO LAKEVIEW NO. 6 IMC13746 100%
MILLSITE
IDAHO LAKEVIEW NO. 9 IMC13749 100%
MILLSITE
TIP TOP MILLSITE IMC13753 100%
Tabor Silver & Gold Project, Montana US
HIGHLAND LODE - 7295 - 70%
MCKINLEY LODE - 7292 - 70%
HOPE - 6623 - 70%
SHENANDOAH - 6624 - 70%
BAY STATE LODE - 6625 - 70%
NELLIE BLY - 9722 - 70%
ALDER FRACTION - 9722 - 70%
PRESCOTT - 9722 - 70%
MALTA LODE - 9722 - 70%
ST. JOHN - 5984 - 70%
BUTCHER GULCH PLACER - - 70%
TRACT 3 OF BOOK 7 SURVEYS,
PAGE 253
BG 9 MMC226241 70%
BG 10 MMC226242 70%
BG19 MMC226243 70%
BG20 MMC226244 70%
BG21 MMC226245 70%
BG22 MMC226246 70%
BG23 MMC226247 70%
DON-A-VERA MMC175327 70%
DON-A-VERA NO. 1 MMC175328 70%
PEARL NO. 1 MMC175355 70%
PEARL NO. 2 MMC175356 70%
EAGLE BLACK NO. 1 MMC175363 70%
EAGLE BLACK NO. 5 MMC175367 70%
NEW WINNETKA MMC175384 70%
TABOR LODE MMC175409 70%