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ATW Gold to produce gold in March
By James West
MidasLetter.com
Monday, February 2, 2009

ATW’s story is one of those great turnaround situations you hear of once in a while, but usually after the stock has had its big run and the gloating over gains is long done. In ATW’s case, the transformation into a junior gold producer in March will provide the impetus for enhanced share price performance in the near term, while continuing development at its Gullewa project will bring added value in the future.

The company expects to begin producing 35,000 ounces annually from their Burnakura Gold Mine in March from a resource of 400,000 ounces, though continuing exploration will add to that number.

The bottom line on this deal is the company is in a position to be producing 100,000 ounces of gold annually within about 18 months. The fact that they have been able to conclude major financings during the last year - testimony to the high expectations ATW investors have that are not dimmed at all by the broader financial system chaos.

The Burnakura project is located in the western part of the Yilgarn craton, Western Australia, home to deposits of gold, nickel, bauxite, mineral sands and tantalum. Past production from the Westn Yilgarn exceeds 17,000,000 ounces of gold production.

The project lies in the Murchison gold mineral field some 50 kilometres south of the township of Meekatharra that has a population of approximately 1000 people. Meekatharra is a mid west town accessed by a paved highway 764 kilometres north of the capital city Perth. The town is a major supply centre for pastoral and mining in the Murchison district.

The purchase of the Burnakura Project includes a turn-key gold operation with a CIL plant capable of 450 tpd production, infrastructure including offices, workshops and a 90 person camp.

The purchase also includes a total of 58.8km2 of claims that lie in a historical gold belt over the Burnakura shear zone that, according to internal records of previous owners and Western Australia Mines Department records, has to date produced 216,000oz of gold from shallow oxide pits and recently approximately 30,000oz of gold from underground.

The project was previously owned by two parties; Extract Resources Limited (EXT) and Tectonic Resources NL (TTR), both Australian Stock Exchange listed companies. Extract originally purchased the project and brought Tectonic in as an operating partner. In 2005, Extract and Tectonic agreed to commence underground production by creating a portal and decline access to ore below the "NOA 2 open cut". Milling began late 2005 and ceased early 2007.

Prior to underground production from 2005 to 2007, the Burnakura Project was mined during the 1990's for shallow open cut oxide to supplement an existing operation some 25km away.

Historically, controls on the mineralization have been poorly understood. East-west structural controls played an important part in hydrothermal fluid movement and gold deposition. Grades up to 25g/t have been intersected in these zones. Due to the limited core drilling below surface, these structures have not been modeled. Recent results from underground mining have highlighted the importance of these structures.

Since purchasing the Burnakura Gold Mine on December 24, 2007, ATW has steadily increased its scope of activities on the project in anticipation of resuming production March of 2009.

As of November 30, 2008, ATW has completed 40 core holes totalling approximately 8421 metres. along the 1500 meter (m) strike length from the underground workings at NOA 2, north to the NOA 7-8 pit.

Highlights included:
• 16 metre (m) intercept grading 9.79 grams per tonne (g/t) gold.
• 8.4 meter (m) intercept grading 14.48 grams per tonne (g/t) gold.
• 8.5 metre (m) intercept, grading 8.4 grams per tonne (g/t) gold
• 38 m rcept, grading 3.0 g/t in drill hole 8NOAD016.
• 23.7 metre (m) intercept, grading 16.0 grams per tonne (g/t) gold, which encountered visible gold.

In respect of refurbishing the Burnakura plant and mill, ATW’s consultants identified several improvements and regular repair issues aimed at bringing the plant to operating status and improving its efficiency. Burnakura’s primary and secondary crusher has been refurbished and the CIL Plant has now been fully commished..

Besides Burnakura, ATW acquired the Gullewa Gold and Copper Project in March last year.

The Gullewa Project is located 450 km north of Perth, 160 km east of Geraldton and 300km south west of ATW’s 100% owned Burnakura Gold Mine in the Yilgarn goldfields of Western Australia.

The Gullewa Project includes a total of 756 km2 of mineral tenements that cover the prospective central and southern portions of the Gullewa Greenstone Belt and include the Gullewa Mining Centre, the Deflector Deposit, the Prince George Mine, the Michaelangelo and Monarch Prospects.

Mining infrastructure assets of the Gullewa Project include a turn-key gold operation with a Carbon-In-Leach plant capable of up to 300,000 tpa (tonne per annum) gold production, a licensed tailings disposal facility, a 50-person camp, offices, workshops, bore fields and haulage roads. The site is currently on care and maintenance.

Just about every other newsletter writer with a decent distribution has invested in ATW over the last year since things really took off in Australia last year, so it should be a comfort for investors considering a position now that there will be ample and continuous coverage to keep liquidity in this stock high.

If ATW’s progress continues, the company could become an attractive acquisition for other mid-tier producers, or, if exploration results in any major discovery, a major.

Either way, I think ATW Venture is a great company to own a position in going forward – especially at these prices.