12 month high, page-8

This is the article without the pics.






Market comm entators contin ue to discuss
gold hitting US$2,500 an ounce within the year.
Global antimony demand has been on the rise
for the past 20 years and the strategic metal
continues to top critical raw materials lists from
those of the British Geological Survey to the
North American automotive industries.
Both outlooks are well-timed good news for
Northwest Resources Ltd. (ASX: NWR) (“Northwest”);
the explorer-developer advancing the Nullagine
Gold and Antimony Project (“Nullagine”) in
the eastern Pilbara into one of Australia’s highest
grade underground mines with production from
2013—complete with current JORC resources of
402,000 ounces gold (Au) and 9,000 tonnes of
antimony (Sb) and plans to at least double that
existing inventory backed by uncapped exploration
upside.
The buzz surrounding Nullagine starts with the
Blue Spec Shear project where production is on
track to take place next year; an east-west trending
shear zone which outcrops over 16 kilometres
within Nullagine, home to high grade gold-antimony
deposits and vast potential for future discoveries.
But importantly, while the area has been on the
radar for more than 50 years, it appears that the
missing ingredient has been Northwest: The team
with the right approach to mining the deposits and
MARCH 2012 ? The International Resource Journal 7
innovative processing strategy to handle historic
metallurgical gripes, set to see the project into nearterm
production and attract international would-be
buyer interest en route.
“At the Blue Spec Shear project, the development
approach we’ve taken is to operate the
Blue Spec and Golden Spec deposits at the same
time, and also use the development as an exploration
platform,” says Northwest Managing Director
John Merity, describing the company’s plans
for concurrently targeting initial 2013 output and
ongoing resource definition.
“The real opportunity of working both Blue
Spec and Golden Spec together is the potential
to discover another Spec between them and to
expand the potential of the high grade system.”
Blue Spec-Golden Spec is shaping up to be
one of Australia’s highest grade narrow vein gold
projects, with imminent production supported
by Northwest’s low cost cutting-edge processing
strategy. Furthermore, coupled with Nullagine’s
Camel Creek Trend project—a 50/50 joint venture
between Northwest and developer Millennium
Minerals Ltd. (ASX: MOY) (“Millennium”) on
track to become the second producing mine in
2015—it’s safe to say that the company is building
a high grade, highly profitable mining hub
with plenty of opportunities for resource growth

To 2013: Blue Spec by numbers
With a JORC resource inventory of 329,000 ounces
at 20.7 grams per tonne gold and 7,300 tonnes Stibnite
currently defined across Blue Spec and Golden
Spec just 950 metres apart from one another,
grounds for operating both deposits together for the
first time are well-founded. Defined to around 300
metres, Golden Spec wouldn’t support a mining operation
on its own; despite its high grades, it wouldn’t
produce enough annually. Defined to around 850
metres, Blue Spec could be a small standalone
mine, but combining them gives Northwest desirable
scale and operational flexibility.
“By operating the two undergrounds at the
same time, mining can continue at Golden Spec
whilst blasting is occurring at Blue Spec, for example,
whereas blasting at a single underground
operation would normally require all underground
staff to be sent to the surface resulting in operational
downtime,” Merity explains.
By approaching the mining of deposits in a
manner allowing long-term exploration to coexist
with targeting minimal cost 2013 production,
Northwest is able to advantageously add to
its resource inventory while establishing itself
rapidly as a high grade gold producer. The
company has begun first stage feasibility studies
for mining, engineering, capital, operating
and offtake pricing—but the plans that have
captivated onlookers (and thwarted the best
efforts of past explorer-developers) are those
of the company’s innovative metallurgy and
processing strategy.
Processing gold-antimony concentrate
Merity says that the presence of antimony poses
a hefty value-adding by-product for the future
operation, particularly given that both mining
methods and antimony market demand have
improved greatly since Anglo American ceased
exploration at Blue Spec in 1978, largely due to
low processing recovery rates.
“Previous owners have had a lot of difficulty
when trying to separate the antimony from gold
because of the nature of the ore up there. They’ve
been forced to walk away from what would otherwise
have been tremendous gold mines given the
ounce grade in the deposits,” he explains.
“We’ve pursued a processing strategy
that doesn’t seek to separate the
antimony from the gold. We can
produce a gold-antimony concentrate
through a flotation process and
achieve pay rate for that which would
match industry standard recovery
grade were we to pursue a full recovery
process onsite.”
MARCH 2012 ? The International Resource Journal 9
Beyond accounting
Mitchell & Partners
CHARTERED ACCOUNTANTS
Since 1964 we have been helping businesses like Northwest
Resources achieve their goals through the provision of careful
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enterprises in many industries, Mitchell & Partners has long had a
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to help our clients every step of the way from setting up initial
structures to raising capital, listing on the stock exchange,
complying with regulatory obligations and guiding their business
direction towards production.
If you are interested in freeing up internal resources to focus on
what you do best, exploration and mining, then please contact
Mitchell & Partners where we can arrange to take the burden of
complex compliance and regulation off your hands.
Choose to outsource any or all of the below
services offered:
• Financial reporting
• Management reporting
• Tax compliance
• Tax consulting
• Company secretarial services
• Advice on listing rules
• Preparation and lodgement of ASX announcements
• Hosting AGM’s and preparing scripts
• Bookkeeping
• Payment of invoices
• Payroll
• Forward looking planning
Steven J. Danielson | Email: [email protected]
James Livingston | Email: [email protected]
Phone: +612 9392 8686 | www.mitchellpartners.com.au
Address: Level 7, 10 Barrack Street, Sydney 2000
MITCHELL & PARTNERS CONGRATULATES NORTHWEST RESOURCES ON
THEIR SUCCESS TO DATE AND IS PROUD TO BE HELPING THEM ACHIEVE
THEIR FUTURE AMBITIONS.
Adopting flotation processing will enable
Northwest to avoid complex hydrometallurgical
separation of the metals, and given antimony
demand it may provide another 10-15 per cent
in equivalent gold revenue. The team is presently
conducting an extensive metallurgical testwork
programme and diamond drilling to obtain approximately
950 kilograms of metallurgical core
samples from the deposits. Results will reveal
what the flotation concentrate will look like, how
low on penalties it is, and assist in refining pricing
discussions. Discussions are underway with
Chinese smelters who may take the concentrate
and use pyrometallurgy to treat the concentrate,
Merity says, and they aren’t the only parties eyeing
Blue Spec’s imminent production offering.
“Another opportunity available to us is to toll
treat the gold-antimony concentrate in the U.S.,”
he explains.
With environmental permitting underway, the
preliminary study report and financial evaluation
due for completion within the second quarter
of 2012 and the final study report and financial
evaluation expected by the year-end, tackling the
metallurgy and processing strategy (warranting
discussions with potential buyers) signifies that
Northwest has cracked the right formula for Blue
Spec-Golden Spec; a key breakthrough which will

likely prove ever more pivotal as further resources
are added to the project’s inventory.
More high grade resources & mines
Given the complex mineralogy, time and cost of
drilling and range of grades evidenced across the
less-drilled lower Blue Spec zone, well-drilled upper
Blue Spec zone, Golden Spec lower zone and
other potential Specs between them, finding belowsurface
deposits of this calibre isn’t easy. Deposits
range between one-to-four metres in width, Merity
says, and while Blue Spec was discovered due to
its outcrop, one could “spend a lifetime drilling from
surface between Blue Spec and Golden Spec and
never hit a blind shoot there.”
The resources defined and incoming metallurgical
results continue to underpin plans for the 2013
production profile, but given Blue Spec’s exploration
upside, they prove to be the tip of the iceberg.
In addition to targeting through put of 100,000-
125,000 tonnes per annum based on conservative
vertical advance rates, the company plans to evaluate
opportunities to increase grades and at least
double its current resource inventory.
“And these aren’t fanciful estimates. They really
depend on following our noses during operation,”
Merity says.
“That’s the inherent difference between
underground and open pit operations; with open
pits you define the entire ore body and that’s it,
whereas for underground you define as much as
necessary to start, then keep following the deposit
down until it becomes uneconomic which
could be as deep as one kilometre at Blue Spec.”
Given the moderate depths to which Blue
Spec and Golden Spec are defined to date, and
the great potential to discover another Spec
between the two, there remain many opportunities
for further discovery and resource expansion.
Additionally, given Northwest’s Camel Creek
joint venture with Millennium for which reserve
estimates for the joint venture deposits are due
in the second quarter of 2012, it looks likely that
the company will have two operating mines at
Nullagine come 2015, and rapidly advance into a
multi-mine producer within the next five years.
“Blue Spec-Golden Spec could become one
of the best mid-size gold mines in Australia in
terms of production and cash costs. And by
putting together the right team to develop that
project, we’ll also be putting together the right
team to take on, acquire and develop new projects”
Merity says, adding that this team already
includes highly respected mine builder Alan King
as executive general manager.
Masterminding the Blue Spec Shear’s metallurgy
and processing strategy has seen Northwest
overcome the development hurdle past
MARCH 2012 ? The International Resource Journal 11
Current resources
at Blue Spec
Blue Spec
-Upper Zone: 122,000 oz @ 42.5 g/t
Au, 2,300 t Sb @ 2.61%
- Lower Zone: 132,000 oz @ 17.5 g/t
Au, 3,200 t Sb @ 1.38%
-2.5 - 4.0m average mining widths
Golden Spec
-75,000 oz @ 8.5 g/t Au, 2,300t Sb @
0.84% including 49,000 oz @ 18 g/t Au
-1.5 - 2.5m average mining widths
project owners have fallen at. Maintaining a
steadfast focus on exploration to increase the
project’s resource inventory alongside reaching
high grade 2013 production is the recipe for
long-term project success. Simultaneously, Camel
Creek reveals the Northwest team to be adept
in attributing focus to its flagship project while
firming up a secondary revenue stream, and each
advancement continues to prove how abundant
Nullagine’s mineralisation and options for project
growth truly are. Within the coming months, Northwest
will further prove that its metallurgical and processing
plans are ideal for Blue Spec-Golden Spec.
It will move through its feasibility studies and ready
to make the transition from developer to producer,
and onto multi-mine producer. There aren’t many
juniors who can see through such strategically
staged, cost-effective multi-deposit, multi-metal development,
but in Northwest, Australia has a startlingly
capable emerging high grade underground
gold miner.
www.nw-resources.com.au