Gold Bullion Development (GBB, TSX-V) President & CEO Frank Basa is not prone to exaggeration or hype – in fact, most would say he’s quite the opposite – so for him to come up with the name “LONG Bars Zone” (an acronym for “Lots of New Gold Bars“) speaks volumes about his faith in the Granada Gold Property and what his company may uncover there. Gold Bullion actually poured its first gold bar at the Granada Mine in 2006. “Lots of New Gold Bars” is music to investors’ ears with gold currently at $1,200 an ounce and possibly on its way to $1,500 or better.
Gold Bullion has started a 20,000 metre drill program at Granada under the watchful eye of GENIVAR, their geological consultant. GENIVAR put together an extremely efficient and effective Phase 1 program. With a limited Gold Bullion budget they covered a wide area with 2,817 metres of drilling and made a significant discovery in the northeast section of the LONG Bars Zone. This was no easy task. They learned a lot more about the geological plumbing of Granada and the potential this property has. And because of that, as they made it clear to me during my on-site visit in March, they expect this next round of drilling to be even more successful.
Here’s our view of what could happen as a result of Phase 2 (speculation, of course, and we don’t wish to heighten expectations, but this does seem very plausible):
1. The Block Model contains more gold potential than first thought (the current non-compliant estimate is 2.4 to 2.6 million ounces) with new discoveries at depth and along the northern boundary where limited historical drilling has taken place;
2. Outside the Block Model, a new resource takes shape in the northeast area with additional drilling. Step-outs to the east and north also prove successful, confirming historical reports and current theories/observations that mineralization is very widespread and broad based at Granada;
3. Significant new resource potential is confirmed west of the Block Model where historical drilling returned encouraging results;
4. Deep drilling within the Block Model (and perhaps outside the Block Model) reveals that indeed there is more than just gold at Granada. We know that silver was mined from this property in the 1930’s. In addition, silver, copper and nickel credits showed up in Gold Bullion’s 2007 bulk sample and in the only four holes that were tested for non-gold mineralization in Phase 1.
The current Preliminary Block Model encompasses a mineralized area that includes only 55% of the LONG Bars Zone current strike length of 1,100 metres. With the Block Model itself open at depth (can’t wait to see what Gold Bullion finds at depths greater than two or three hundred metres), and significant mineralization discovered east, west and north of the Block Model, it’s very hard to imagine this deposit ultimately proving up to be anything less than five million ounces.
The start of the Phase 2 drill plan seems to be very well thought out. Gold Bullion is drilling west to east along the northern boundary of the Block Model which will lead them to the east-northeast discovery area where a significant number of additional holes will be drilled. From there they will step-out to the north and the east.
The waste pile area in the northwest part of the LONG Bars Zone – just east of Pit #1 and within the Block Model – has been of intense interest for geologists. Gold Bullion’s first three holes in Phase 1 were drilled at the very western edge of the waste pile and two of them came up with interesting results including GR-09-02 which returned 1.74 g/t Au over 32.5 metres (from 15.5 to 48 metres). The first holes of Phase 2 are being drilled at an angle from just north of the waste pile right into the guts of the northerly- dipping Block Model structure which GENIVAR hopes to intersect. This has the potential of delivering some impressive initial results. Multiple known vein structures are going to be tested, and GENIVAR will also get an even better understanding of the location of faults and – importantly – their orientation. GENIVAR knows what’s it’s doing and they are going to succeed. I’m no geologist but I’ve been around the resource business a long time. My head and my gut both tell me GENIVAR’s “genius” is going to nail down a deposit here that’s going to shock a lot of people. These things take time but it will come to fruition.
If geologists like what they see in the early part of Phase 2, expect a second drill rig to arrive on the scene very quickly. The advantage of two rigs is very clear – one can focus on infill and definition drilling within the Block Model while the other can complete exploratory drilling elsewhere. Twenty thousand metres could be completed by the end of July or August. Or perhaps we’ll see more than two drill rigs. Anything’s possible.
Let there be no doubt – as exciting as this play has been since the 1st of March in particular, the real excitement has yet to even begin. It’ll be a summer to remember in the LONG Bars Zone and we’ll be going back there to bring this story home to investors like never before.