2011 Top 10 Highlights In a dismal year for shareholders, the company experienced a number of highlights. Here are my top 10:
10. New CEO
Rob Garden was appointed as the new president and CEO on Oct 25. John Tosney, with his vast experience including Starrex Mining (Star Lake) and SMDC, will serve as Executive Advisor. The focus for the company will now shift to business and expanding it's marketing. Ron Netolitzky announced he is happy to have successfully cleared the "getting into production" stage and is now able to go back to the field and break rocks w/ Klaus. Should mean that Netolitzky can now focus on increasing the gold reserves needed for production.
9. Acquisitions
On June 21, GBN announced the acquisition of the North Lake Deposit which is ~90 km south of Jolu. North Lake has a historical resource estimate of 2.36M tonnes @ 2.4 g/t, a warehouse containing intact core samples of the drilling, and the potential for a multiple zone high grade deposit. The cost of the property was ~$300,000.
On Aug 23, GBN announced the acquisition of Camaco's Preview Lake and Little Deer Lake gold projects ~85km south of Jolu. Historical drilling by Cameco, SMDC, and Uranerz.
These acquisitions virtually locked up all the best remaining properties in the La Ronge Gold Belt.
8. Fireweed Discovery
Fireweed, a couple km from Komis/EP, has been referred to as the future of Golden Band. The initial discovery was a 250m strike length (known strike length at Roy Lloyd is currently 800m, Golden Heart is 400m open to the north) and open in both directions with the exposure of 36m of east west trending gold mineralization which is unusual compared to the standard NW/NE minerizations found in La Ronge.
The discovery was immediately follow up with a 4 hole 335m drilling program creating a 50m squared "fence". Excellent initial results included hole FF-01 9.14 g/t over 2m, and FF-02 4.14 g/t over 4.7m.
7. Golden Heart Phase 1
The importance of this drilling program decides whether Golden Heart will remain an open pit or become an underground mine. Currently, the known strike length of 400m is open to the north with an open vertical depth of 400m. The Phase 1 drilling program confirmed the potential to expand the high grade zones beyond the known resource limits. 16 holes were drilled for a total of 1120m with only one hole showing insignificant results.
Golden Heart was purchased by GBN in 2006. It has seen extensive drilling by Golden Rule led by Netolitzky but limited drilling by GBN. Of the ~145 holes drilled led by Netolitzky during the 1980's and 90's resulted in intercepts such as 9.7 g/t over 5m, 13.2 g/t over 6.4m, 29.7 g/t over 2.5m, and 11.5 g/t over 3m. GBN, by my count, has only drilled a total of 20 holes, at the Golden Heart deposit (otherwise known as Weedy Lake Main or B zone). Past results have been excellent and Phase 1 of the current infill drilling program confirmed the potential of high grade deposit to advanced to development within the next two years. The development of Golden Heart will justify the expansion of the mill capacity from 700 tpd to 1000 tpd or 75,000 oz/yr to 100,000 oz/yr.
6. Roy Lloyd Achieves Expectations
It was Q2 before drilling and blasting issues at Roy Lloyd were resolved and the mine began meeting production expectations. Q2 saw a 30% increase in production over Q1 from 22000 tonnes at 12.94 g/t to 28650 tonnes at 11.95 g/t. Production expectations from Roy Lloyd were 350 tpd @ 12 g/t. Q2 provided ~320 tpd production from Roy Lloyd which was an increase over Q1 tonnage of ~230 tpd which was an increase over production in April of ~217 tpd. Steady improvement.
Other positives included the increased strike length of the ore zone between the 1265 and 1295 levels beyond that identified in the 2009 PFS. As well, Phase 1 of the surface drilling program at Roy Lloyd has commenced to be followed by an underground drilling program to increase the reserves available for mine planning.
5. Komis/EP
A successful Phase 1 drilling program confirming the high grade resources along strike and to depth at Komis in Feb. The program boasted a triumphant 8 holes of 1532m and intersections such as 120 g/t over 1.5m including a multiple of intersections in almost every hole. It was a confirmation that GBN could continue with an aggressive development program for komis and that the deposit was open at depth.
After months of waiting, it was finally announced on Oct 31 that blasting had began at EP. It has now been confirmed that mining and stockpiling of EP has commenced.
As well, test mining of the underground muck remaining in the stopes of the Komis mine began as the year came to an end. The development should lead to an increase in the current zero reserves at Komis. Considering there were ~70,000 oz when Komis was modelled as an open pit mine I would expect similar from the underground.
It would be a bonus for GBN to produce an extra 1500 oz in Q3 from Komis and EP. The company is cash strapped and an extra couple million in cash flow would help kick the can to increase the probability of sustainability.
4. Mallard Lake Approval
The approval of Mallard Lake Tailings is truly an unrecognized game changer for Golden Band. Being restricted to the JAGTMF would have created production limitations and higher costs for the company. The approval of Mallard Lake adds, after increasing the height of the berm walls surrounding the lake, another 6 years of tailings deposition to the project. The Oct NR states 3 years at 700 tpd but the 2009 PFS states that the JAGTMF will hold 160,000 m3 and Mallard Lake will have capacity for another 430,000m3 of tailings. The PFS states the original project to be 4 years of production with 154,000m3 of life remaining in Mallard Lake at the end of the project.
3. Golden Band Resources Pours First Gold Bar
On Jan 12 GBN poured it's first gold bar clearing another hurdle on it's path to production.
2. Golden Band Achieves Commercial Production
After what seemed like an eternity, especially after the accident and equity financing, GBN finally reached commercial production on April 1 (April Fool's Day and the market still doesn't believe it!!). Everywhere you look GBN is still listed an explorer under it's company profile. GBN produced 3349 oz in March, 2945 oz in April, and it's been a steady increase in production and decrease in costs ever since.
1. First Ever Company Profits
GBN realized it's first profits ever in Q2 this year. An amazing feat considering they were only in production for 7 months. They company produced 11,870 oz in Q2 averaging 3900 oz/month, over 47,000 oz/yr. Costs have improved steadily quarter over quarter from $908/oz to $900/oz. Income from operations in Q2 was $4.5M, with a net income of $2.3M. With the addition of 2 more mines, Komis and EP, production is expected to increase from 400 tpd to 700 tpd and atleast 70,000 oz/yr. The increase in tonnage should mean a decrease in cost/oz. Netolitzky is expecting a further increase from 700 tpd to 1000 tpd and 100,000 oz/yr and long term plans of a second high capacity mill to process the over 1M low grade oz in the Greater Waddy area. This company may very well be on it's way to being valued as comparable established producers such as Claude, Wesdome, San Gold, Richmont, and Lake Shore.