Frank Basa in the field
The 11,000 hectare Granada project is located in Northwestern Quebec on the world famous Cadillac Trend. Since the 1920s exploration here has yielded extraordinary results and the Cadillac Trend is now host to many large scale mines including, most notably, Osisko’s 10 million ounce Malartic gold property, which is located in close proximity to Granada.
The region has ample supplies of water and electricity, as well as a highly specialized work force of mining professionals. Mario Provencher, mayor of the nearby town of Rouyn-Noranda, is keen to talk up the local potential: “On a per capita basis, we have the largest number of engineers in the province, as well as the largest drilling industry in the province. We are the perfect place to start a mining business”.
What’s more, at a provincial level the government of Quebec takes an active role in promoting exploration within its borders and offers a 40 per cent annual rebate on funds spent on exploration. However, Roger Thomas, a director of Gold Bullion Developments, has found this rebate system slightly exasperating. “They owed us a total of C$4.5 million for work we did up until June 2011”, he says. “We monetized about C$2 million already and they owe us approximately another C$2 million. You can’t rely on the government to pay on time.” Despite the delay, anywhere else you can’t expect the government to pay at all, but it can’t be easy managing budgets under such circumstances.
All in all, though Gold Bullion looks pretty well positioned. The region is mining friendly, and in terms of upside the presence of some major players in the area means that the potential for consolidation is always on the cards. In particular, Osisko has a little-known joint venture property with a company called Threegold Resources that lies immediately adjacent to Granada. While it is too early to tell if Osisko has an eye on the Granada property, they are actively exploring just over the claim line.
And Frank Basa, president and chief executive of Gold Bullion, is very upbeat about the prospectivity. “Anybody being anywhere on the Cadillac Trend will eventually find something”, he says. “Drill it and you will find it”. Last year’s 80,000 metre program increased the surface footprint of the LONG Bars zone of mineralization at Granada fivefold, meaning that once again Granada had exceeded expectations.
“It’s a little larger than we than we thought”, says Frank. “When we started this we were only looking to do 2,800 metres and we’ve done 80,000, and still haven’t found the extent of mineralization. We’re doing another 6,000 just to have a look, and more than likely we will be drilling some more. I think right now we may be only 10 per cent into our overall exploration program.”
And Roger points out that the grades are pretty good too. “I would say the significant point is that our grade on the 43-101 is better than what Osisko is mining”, he says. “The cut-off is higher. What’s not talked about in the resource estimate is that generally speaking our project has shown a consistent average of 30 per cent upgrade due to nugget effect.” This nugget effect is one reason why the company got interested in Granada in the first place, after a bulk sample showed a significant improvement on the grade from drilling. “The drill grade was 0.8 of a gram and we pulled 1.62 grams”, continues Roger. “The upgrading factor was 100 per cent - staggering really. It took Frank by surprise, he had no idea he was going to get that kind of a return, and it was a very profitable pursuit. Following that bulk sample, the company’s increased its landholding from the original 71 hectares up to 2,400 hectares, and eventually up to the current 11,000 hectares.
More exploration work is planned, as Roger explains. “We’re doing a 6,000 metre drill program in the north to try and isolate some of the high grade material at 300 metres and below. There was an indication of high grade from a historic hole from the 1990s. They went down 750 metres and the mineralization that they assayed for was from 300 to 700 metres, and it was fairly good grade.” Being situated just down the road from the deepest mine in Canada, those depths don’t represent any sort of challenge at all. And sometimes a little local knowledge goes a long way - Roger reports that: “all the old timers we’ve spoken to have repeatedly said the value of the property will be found underground”.
In the meantime, there’s still 10,000 metres of core from last year’s exploration program to be tested, 30 per cent of data collected last year. So, what with new exploration at depth and the remaining core from last year, the company expects to add significantly to the maiden resource later this year. Watch this space