Gold Bullion Development
Shares outstanding: 158,000,000
Recent Share Price: $ 0.46 CAD
Market Capitalization: $72,680,000
52 Week High/Low: 0.38/0.93
Structure: 1.2 km strike length, 350 metre thickness and roughly 300 metre depth.
Granada,Gold Bullion’s flagship project is a low grade bulk-tonnage golddeposit on the Cadillac Trend in Quebec the most prospective gold rusharea as of late. Gold Bullion is still currently drilling for structurebut the deposit remains open in all directions on the 11,000 hectaresplus they own (which has been increased from a land position of only 71hectares a year ago today).
GBB Valuation Comparables:
Gold Companies With Resource Estimates in Past 6 Months
TRR - Reached market cap of $630 million based on Resource Estimate of 4.2 Moz gold Inferred at Cote Lake Deposit. That’s a valuation of $150/oz gold in Ontario. Now trading at $580~ million market cap.
Share Price April 1st 2010: $1.14
Share Price Now: $4.74
ORE- Reached market cap of $184 million based on 1.6 Moz Indicated and 1.9Moz inferred in at their Bombore Deposit in Burkina Faso. That’sa valuation of $53/oz gold which was cheap at the time since theirmarket cap has responded trading now at a market cap of $400 million orcloser to $115/oz gold based on reserves.
Share Price : April 1st 2010:
.70
Share Price Now: $4.68
RVC- Reached market cap of $200 million based on 1.8 Moz Indicated and2.35 Moz Inferred at their Blackwater Deposit in British Columbia. Sincethey have reached a market cap of $318 million or $78/ounce of gold.
Share Price April 1st 2010: $1.73
Share Price Now: $7.20
- Brett Resources bought out last year by Osisko.
BBR vs GBB
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. Thisestimate excludes recent extensions found ENE and does not give anycredit to our Long Bars Zone 2 which is said to be similar in dimensionsand 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 (allhigh 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 over31,000 metres of driling on their Hammond Reef deposit, a total of49,000 metres between historical (18,000 metres) and their own.
Gold Bullion- To date GBB has drilled over 40,000 metres across their Phase 1, 2and 3 drill programs but also have a database larger than Brett of over490 historical diamond drill holes comprising 25,000 + metres for atotal of over 65,000 metres to base on the Resource Estimate on.
Infrastructure for the two companies is close to the same as GBB located located in Quebec, Brett in Ontario, except GBB is half the distance from major highways/towns.
Brett Resources - No other existing base metal properties
Gold Bullion -This month are drilling to start exploration with a large Phase 1 6,000metre drill program planned for their Castle Silver Mine. Will bedistributing shares for every share currently held in GBB at the end ofsummer for their silver property.
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
Basedon these results alone - 114 diamond drill holes comprising of 31,000metres as well as 85 historical drill holes of 18,000 metres - a totalof 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.
Thebase case Inferred Resource is now 155 million tonnes at 1.04 grams pertonne (g/t) gold (Au) totaling 5.19 million ounces (oz) of Au at a 0.6g/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
Brettwas bought out with 110 M shares outstanding for $3.50/share or $385million dollars based on 6.7 Moz at 0.7 g/t au. Currently Gold Bullionis valued at about $60 million dollars with a very likely possibility ofcoming up with at least 3+ million ounces in their first ResourceEstimate. Brett was purchased for $58.00/oz on an INFERRED resourcebasis by Osisko based on their 6.7 million oz gold.
Gold Bullionis looking to prove at least 3 million oz + we know we have a similarstructure out East that looks to contain at this point at least 1.5 Mozand we will be able to test for more high grade structures in the nextmonth or two as we start drilling the Aukeko Shaft. At 158 M sharesoutstanding with close to $8 million in the bank, a Castle Silver Mine,and a property that's structure has been doubled since this summer weshould not be seeing our Granada property valued at roughly $60 millionbased on at least 3 million ounces of gold in the Preliminary BlockModel alone.
What must also be remembered is the industry avg.is over $105 per oz anywhere in the world for gold and Osisko currentlygets $400/oz whereas other Ontario/Quebec companies like Lakeshorereceive over $850/oz for their Proven/Probable Reserves. Valuing us atonly $20 an ounce right now in Quebec is far too conservative for whatwe've shown the market. Low grade tonnage deposits are not rewarded bythe Market on news releases until the Resource Estimate is in thepipeline and this is the best chance to be scooping up shares for a 150 %on the Resource Estimate as we will not be trading at these levels in amonth or two in anticipation of it. Osisko in December of 2005 closedat 0.50 cents a share and with their Resource Estimate the next year andonly 20 M shares of dilution closed the next year at over $4.50 a sharewith gold hovering around $700/oz. They already had 190 M shares outand were valued close to $1 billion dollars with gold at $700/oz andtheir estimated cash costs at $325/oz with only 6 Moz of inferredresources.
“OsiskoExploration Ltd. (OSK:TSX-V, EWX: Deutsche Boerse) is very pleased toannounce the first National Instrument 43-101 compliant, inferredresource estimate from its 100%-owned Canadian Malartic deposit, locatedin the Abitibi region of Quebec. RSG Global Consulting Pty Ltd. ofPerth, Australia ("RSG Global") has authorized Osisko to release resultsof their inferred resource estimate on the main portion of the CanadianMalartic gold deposit. Based on a lower cutoff grade of 0.5 g/t Au andusing various statistical approaches, RSG Global has estimated aninferred resource between 6.54 and 6.59 million ounces gold. “
Basedon $700 gold in 2006 they received a valuation of approximately $150per Inferred ounce on their Malartic deposit. We're getting $20 an ouncebefore our Resource Estimate in 2011 with $1510 gold with a deposit onstrike with Osisko with dimensions that are almost the same now instucture. The main problem with GBB is it lacks buyers on their drillresults as the results always look bad to the average investor but thosethat do their homework can see the deposit building. Companies without"exciting" drill results lack catalysts for the share price exceptResource Estimates or Preliminary Economic Assessment Studies thereforethey basically go unnoticed until they have a definitive label on theounces in the ground. With the tonnage GBB has and over 50,000 metres ofdrilling + another 30,000 metres historical they will have no problemcoming up with 3 Million ounces at Granada for the 43-101 ResourceEstimate when it’s filed.
Target Price 3 Months:
.90 - $1.10
Current Price:
.46
Market Capitalization @ $1.10 = $173,000,000
Fair Market Valuation @ 2.5 Million Ounces Gold Inferred
$120 Industry Average Gold Price @ 30% discount = $84/oz of gold
2.5 X $84/oz = $210 million dollars
Market Capitalization = $210 M or $1.33 a share, more than a 250% gain from here.
Thosevalues are discounted for ounces from my estimate of 2.9 Million Ouncesat Granada Inferred as well as a $120 dollar Industry average goldprice at $1400 gold.