While trying to find more flagships projects to compare to ours at Granda I've overlooked one of the most obvious for a while which was the acquisition earlier this summer of Brett Resources by Osisko.
Brett Resources: At time of sale Brett had proven up an Inferred resources of 6.7 million ounces of gold at 0.7 g/t au to depth of 300 metres.
Gold Bullion: Potential in block model alone adjusted to 300 m depth for 4.0 + Million oz gold, as down to 70 m lies our potential for 2.4 to 2.6. This estimate excludes recent extensions found ENE and does not give any credit to our Long Bars Zone 2 which is said to be similar in dimensions and mineralization to the Block Model.
Brett Resources: Metallurgical data: Gold used for sample averaged 0.60 to 3.4 g/t au, recovery was 93%.
Gold Bullion: Metallurgical data: Gold used for sample averaged 0.5-0.6 g/t au (all high grade samples were excluded) still came up with 93% recovery rates.
Brett Resources: At the date of being bought out Brett Resources had completed just over 31,000 metres of driling on their Hammond Reef deposit, a total of 49,000 metres between historical (18,000 metres) and their own.
Gold Bullion - To date GBB has drilled over 40,000 metres across their Phase 1, 2 and 3 drill programs but also have a database larger than Brett of over 490 historical diamond drill holes comprising 25,000 + metres for a total of over 65,000 metres to base on the Resource Estimate on.
Infrastructure for the two companies is close to the same as we are both located in Quebec except GBB is half the distance from major highways/towns.
Brett Resources - No other existing base metal properties
Gold Bullion - This month are planning to start exploration with a large Phase 1 6,000 metre drill program planned for their Castle Silver Mine.
Brett Resources Significant Drill Results
2007
38.5 m @ 0.81, 43.5 m @ 1.22
84 m @ 1.05, 58.5 m @ 0.74, 48 m @ 0.95, 69 m @ 0.73, 43.5 m @ 1.23
102 m @ 1.27, 108 m @ 0.93, 43 m @ 1.00, 60 m @ 1.04
244 m @ 1.04, 82.5 m @ 0.88, 267 m @ 1.02, 111 m @ 0.9, 112 m @ 1.2, 111 m @ 0.93
120 m @ 1.59, 178 m @ 1.08, 175 m @ 0.98, 114 m @ 1.26, 127.5 @ 1.03
2008
37 m @ 3.35, 22 m @ 3.61, 30 m @ 2.53
55 m @ 1.49, 49.5 m @ 1.44, 123 m @ 1.4
162 m @ 1.23, 102 m @ 1.19, 154 m @ 1.2
141 m @ 0.65, 91 m @ 0.67, 252 m @ 0.55
Based on these results alone - 114 diamond drill holes comprising of 31,000 metres as well as 85 historical drill holes of 18,000 metres - a total of 49,000 metres Brett Resources came up with the following estimate.
- Less significant assays under 150 metres at under 0.4 g/t are not included as I omitted GBB's less appealing holes as well.
The base case Inferred Resource is now 155 million tonnes at 1.04 grams per tonne (g/t) gold (Au) totaling 5.19 million ounces (oz) of Au at a 0.6 g/t cutoff.
Gold Bullion Development Significant Drill Results
2010
73 m @ 0.88, 61 m @ 0.55, 65.5 m @ 1.21, 68.8 m @ 1.07, 123 m @ 1.07
75 m @ 1.5, 20.5 m @ 4.98, 68 m @ 2.16, 182 m @ 0.44, 40.5 m @ 4.05
116 m @ 1.69, 356.6 m @ 0.6, 69 m @ 2.59, 127 m @ 0.76, 62.4 m @ 1.06
141 m @ 1.07, 228 m @ 0.5, 135 m @ 0.62, 118 m @ 0.45, 161 m @ 1.2
223 m @ 0.6, 198 m @ 0.74, 108 m @ 0.78, 78 m @ 0.87, 108 m @ 0.63
101 m @ 0.51, 83 m @ 0.97, 177 m @ 0.51, 151 m @ 0.57
77.5 m @ 0.72, 73 m @ 1.28, 78 m @ 0.7, 94 m @ 1.03
Brett was bought out with 110 M shares outstanding for $3.50/share or $385 million dollars based on 6.7 Moz at 0.7 g/t au. Currently Gold Bullion is valued at about $80 million dollars with a very likely possibility of coming up with at least 3+ million ounces in their first Resource Estimate. Brett was purchased for $58.00/oz on an INFERRED resource basis by Osisko based on their 6.7 million oz gold.
Gold Bullion is looking to prove at least 3 million oz + we know we have a similar structure out East that looks to contain at this point at least 1.5 Moz and we will be able to test for more high grade structures in the next month or two as we start drilling the Aukeko Shaft. At 150 M shares outstanding with close to $15 million in the bank, a Castle Silver Mine, and a property that's structure has been doubled since this summer we should not be seeing our Granada property valued at roughly $60 million based on at least 3 million ounces of gold in the Preliminary Block Model alone.
What must also be remembered is the industry avg. is over $105 per oz anywhere in the world for gold and Osisko currently gets $400/oz whereas other Ontario/Quebec companies like Lakeshore receive over $850/oz for their Proven/Probable Reserves. Valuing us at only $20 an ounce right now in Quebec is far too conservative for what we've shown the market. Low grade tonnage deposits are not rewarded by the Market on NR's until the Resource Estimate is in the pipeline and this is the best chance to be scooping up shares for a 3-4 bagger on the Resource Estimate as we will not be trading at these levels in a month or two in anticipation of it. Osisko in December of 2005 closed at 0.50 cents a share and with their Resource Estimate the next year and only 20 M shares of dilution closed the next year at over $4.50 a share with gold hovering around $700/oz. They already had 190 M shares out and were valued close to $1 billion dollars with gold at $700/oz and their estimated cash costs at $325/oz with only 6 Moz of inferred resources.
Osisko Exploration Ltd. (OSK:TSX-V, EWX: Deutsche Boerse) is very pleased to announce the first National Instrument 43-101 compliant, inferred resource estimate from its 100%-owned Canadian Malartic deposit, located in the Abitibi region of Quebec. RSG Global Consulting Pty Ltd. of Perth, Australia ("RSG Global") has authorized Osisko to release results of their inferred resource estimate on the main portion of the Canadian Malartic gold deposit. Based on a lower cutoff grade of 0.5 g/t Au and using various statistical approaches, RSG Global has estimated an inferred resource between 6.54 and 6.59 million ounces gold.
Based on $700 gold in 2006 they received a valuation of approximately $150 per Inferred ounce on their Malartic deposit. We're getting $20 an ounce before our Resource Estimate in 2011 with $1370 gold with a deposit on strike with Osisko with dimensions that are almost the same now in stucture.
We don't belong in the 40's nor do we in the 50's and the big boys will take the opportunity to grab more shares if you don't as you can bet they'll be averaging down on more tonnage while the weak hands sell on "weak grades". This story was never about high grade intercepts, has NEVER been about grades but suddenly on this news release our chart gets beaten to hell and everything is all doom and gloom. Osisko never had grades which shot them up on NR's, nor did Brett and nor did more recent Orezone. Before the resource estimate Orezone traded in a channel of 0.60 - 0.80 cents and promptly gapped up to over $2 and then to $3 and again to almost $4 before settling in the low $3's after their Resource Estimate at 1.4 measured and another 1.4 inferred in West Africa.
We don't belong at this market cap and I could care less what the junior market looks like right now as if you have value stocks which are severely undervalued we are already trading at too far of discounts to reserves in the ground. Are they going to knock us down to 35 cents where we'll have a $55 million dollar market cap? That'd be really representative of what we have at GBB with $5 M still in the bank and a silver play worth at least $5 million that's giving us a market cap of $45 million left or $11.25 per oz in the ground of gold right now? If that's the case I'll be picking up another 50k shares at 0.35 cents and getting $60 per oz 3 months from now. My original price target for GBB was $2 but since we've been manipulated we may have some trouble getting over hurdles with the cheap shares accumulated. Regardless 3.5 Moz au minimum at $80 per oz is $280 million dollars or a $1.50 share price, with a 43-101 around the corner you're not going to see shares under 50 cents much longer.
GBB has increased their land position from 71 hectares to over 11,000 hectares in the past year alone which speaks volumes to the potential they see on the property. An increase of over 16,000% in land package in less than 12 months.
Look at TRR, ORE, CUU, RVC prior to and after Resource Estimates and it's easy to see that we're not going to be trading at this discount the closer the 43-101 is to coming. You can buy now for under 45 cents or you can wait to buy back over 50 cents after we've released our next set of drill results and are that much closer to having Genivar begin compiling our 43-101. TRR is getting $136.50 per oz valued solely on gold oz's in the ground and is in Ontario as favourable a mining jurisdiction as Quebec. If you believe we have 4 million ounces or less then shares at this price is a no-brainer.