BMG drilling 518k ounce WA gold project - scoping study imminent

Our WA gold Investment BMG Resources (ASX: BMG) just put out an update on its 10,000m drill program at its 518k ounce gold project in WA.

BMG is currently ~1,100m through the 10,000m program - mainly targeting extensions at depth to its existing resource.

BMG working theory is that its project could host a Never Never style ductile gold system - basically where the grades of its resource are getting bigger as drilling goes deeper.

Never Never was the discovery Spartan Resources made in mid 2024 after drilling a few deep holes way below where the lower grade open pits that had been mined on its project sat.

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A few of those holes came in and Spartan defined a very high grade 2.1M ounces gold discovery at an average grade of 8.8g/t over the next 2.5 years, eventually being taken over for ~$2.5BN by Ramelius Resources.

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It’s still very early days for BMG, but with this program, BMG is lobbing a few holes down to depths of ~500m - IF any of those come in then it could make that exploration theory a lot more real.

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(Ofcourse its very early days and this is exploration drilling - there is no guarantee that Never Never style analogue eventuates).

Ultimately, BMG still has the 518k ounce resource on the project - which for us limits the downside risk (even IF that deeper drilling doesn't come in).

We Invested in BMG because we thought at a then $25M market cap with an 518k ounce resource close to existing mills - the current resource alone could be developed with gold prices where they are. (BMG is now capped at $35M)

On that front - BMG has a scoping study coming which should give us a pretty good idea of the potential economics of that scenario.

Given BMG’s project sits on a mining lease AND BMG has an MoU signed with one of the nearby processing plants we are looking forward to seeing the results of that study.

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BMG said in today’s announcement that study is nearing completion and will be released following this round of drilling (so that these results can be incorporated):

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Where is BMG at with the current drill program?

Today’s announcement said that BMG had drilled “RC pre-collars” for the first seven holes for a total of ~1,100m.

Pre-collars are when companies drill the first part of a hole using an RC rig to save costs, before continuing down to the targeted depths with the more expensive diamond rig.

This method of drilling is cheaper, BUT changing to diamond when you start getting into the guts of a system (or where your main target areas are) means the company can get a lot more information (including drill core - which gives information on the structures at depth too).

So right now, BMG’s drilled roughly seven holes down to depths of ~150m.

BMG expects to have assays from the RC sections back inside the next 4-5 weeks.

And in the meantime we could get visuals from the diamond core (or assays after).

We like BMG’s Abercromby project (where the company is drilling right now) because:

• Existing High-Grade Resource: The project already hosts a 518k ounce gold resource, which provides a strong valuation floor and a "safety net" for investors.
• Expansion Potential: There is significant "blue sky" upside, with management targeting a resource upgrade to over 1M ounces through upcoming drilling.
• "Never Never" Discovery Potential: Geologists believe the project could host a high-grade, ductile gold structure similar to the "Never Never" discovery (Spartan Resources), which saw a multi-billion dollar valuation surge.
• Toll Treatment Strategy: BMG has a non-binding MoU with a nearby mill (Wiluna Mining). This allows for a low-capex, fast-track pathway to production without the need to build a $100M+ processing plant.
• Granted Mining Leases: Unlike many junior explorers, the core resource is already on granted mining leases, significantly reducing the regulatory timeline to start production.
• Tier-1 Location: Situated in the "Northern Goldfields" of Western Australia, it is surrounded by major mines and infrastructure owned by companies like Northern Star and Genesis Minerals.
• Immediate Milestones: A scoping study for a low-capex mining proposal is due in the current quarter, providing a near-term catalyst for a potential share price re-rating.

But we also like BMG’s other assets - especially the one sitting next door to $1.6BN Minerals 260 - who just got a deal done with one of the biggest gold royalty companies in the world ($XBN Franco Nevada).

See our deep dive on that other project here: What does $71BN Franco Nevada’s deal next door mean for BMG?

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What's next for BMG?

🔄 Drilling at the 518k ounce Abercromby project in WA

This is now the first time Abercromby has had a large (10,000m) drill program on it since the maiden resource on the project back in 2023. (source)

We are hoping to see BMG hit extensions to the existing resource.

Here are the milestones we will be tracking:

• ✅ Drilling started
• 🔲 Assay results
• 🔲 Resource upgrade

🔄 Scoping study for the Abercromby resource

BMG also has a “Scoping study into a potential low-capex, fast payback mining proposal” due this quarter on its 518k ounce gold resource at Abercromby.

We are hoping to see the results from this fairly soon.

We note there is a previous study on the project from 2024 using a gold price of A$3,500 per ounce that showed ~$150M in cashflow over 14 quarters (~3 years).

We are hoping to see a material upgrade to those numbers now with gold at ~A$6,700 per ounce.

We also note that was on just 120K ounces of production - IF BMG finds more gold OR brings more of its resource into the mine plan then the numbers could increase again…

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The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

🔄 Geophysics on Bullabulling project (next door to Minerals 260)

In the recent presentation BMG put out, BMG said it plans to run geophysics and have it completed before finalising drill targets for Q2 this year (source).

🔲 Name change to "WA Gold Limited" (WAU)

Shareholder vote on 15 April 2026. Reflects the company's strategic focus on WA gold. (source)