Market reaction to Gold Bullion’s news yesterday on the resumption of drilling at Granada was rather ho-hum but understandable given the extreme volatility of the markets. Yesterday’s dramatic events prevented us from posting a detailed report on Gold Bullion last night as we had planned, and we apologize, but that report is in progress and we’ll be posting it over the weekend.
During this market turmoil investors need to remain focused on some key things with Gold Bullion:
1. The inherent value: If we assume GBB has a five million ounce gold deposit on its hands, and we believe that’s a safe and conservative assumption, then the market is currently placing a value of just $8 an ounce on those projected (non-compliant) ounces;
2. 20,000 metres of drilling underway and more after that: Gold Bullion is aggressively attacking this property and that’s going to mean constant news flow and new discoveries;
3. Preliminary Block Model update by the fall and a preliminary 43-101 resource calculation by year-end: If the initial Block Model outlined the potential of 2.4 to 2.6 million ounces within a confined area of the LONG Bars Zone, taking into account just over half the current strike length, what’s the updated Model going to project after 20,000 metres of drilling? The market is a forward-looking machine and it’s also going to be anticipating the initial 43-101 by year-end which will have the effect of increasing the market’s per ounce valuation for Granada.
It’s not hard to see the BIG picture here and why Gold Bullion could easily command a market capitalization of several hundred million dollars within the next six to nine months if ounces are proved up at Granada as we expect.