"Guy just keeps getting bigger and better."
You can say that again. Another nice little hole announced just now:
biz.yahoo.com
Guyana Goldfields Intersects 304.1 Metres of 4.85 g/t Au.
And here is the Sprott analysis from a few days ago:
Sprott is Increasing Target To $10.50, Increasing
stockhouse.com
Recommendation To Buy From Buy (Speculative):
A Great Start In New Zone! -- Guyana Hits 23 m @ 59.6 g/t: Guyana Goldfields released more positive drilling results after market close last night, this time on a new target located roughly 8 km north of the Rory’s Knoll discovery. Two of four initial drill holes hit what we consider to be economic mineralization in this environment, with one hole, MRD-4, intersecting a spectacular 23 m @ 59.6 g/t, beginning 2 m below the surface. The high values were carried largely by a 4-metre intersection of 335 g/t—if the high grades were conservatively cut to a maximum of 25 g/t., the hole still grades almost 5 g/t over the 23 m length. The other highlight hole, MRD-2, hit a respectable 31 m @ 2.12 g/t starting right at surface.
All the drilling so far is very shallow, with economic intersections limited to the upper 20-25 m at this time. There is little analysis or
interpretation in Guyana’s press release, suggesting that it may have been positively surprised by the grades in MRD-4, but had to release them because it is very material to the overall Company. We do not know at this stage whether Marupa will end up being a high-grade vein-style deposit like Aleck Hill or a widely disseminated deposit like Rory’s Knoll. The drilling so far is probably restricted to the saprolite (hard unconsolidated material), which can distort geological features due to tropical weathering. Clearly Guyana has a new high-priority target that could develop into a new ore zone for an eventual large gold mine in the area.
Marupa is part of the overall Aurora group of exploration permits, but on a separate permit, north of the Cuyuni River. Since the discovery of Rory’s Knoll in 2004, Guyana’s regional geophysical work suggests that the Rory’s Knoll, Aleck Hill and other smaller zones (known as the Golden Mile) are associated with a small granitoid intrusion, which formed off the side of a large regional granite body (the Aurora Granite). Coincident geochemical sampling done by Guyana as well as placer and artisanal gold working confirm the importance of these intrusions. The Marupa target is associated with another intrusion, albeit two to three times larger than the Golden Mile in terms of its geophysical signature. Guyana has done limited geochemical sampling on the southern margin of the intrusion, and the drilling announced yesterday is following up on some favourable
sampling that did find high-grade anomalies in the saprolite (previously reported).
Our understanding is that 11 holes were drilled in an initial program, and so we expect the remaining seven holes to be reported in one or two more press releases over the next month. Guyana should also report a steady stream on in-fill and delineation drilling from Rory’s Knoll and Aleck Hill over the next few months, before a deep drilling rig is set of to drill Rory’s Knoll at 1000 – 1200 m depth this summer. This deep drilling could extend the potential ounces by 1 to 1.5 MMoz if successful, and could be an exciting milestone for the Company. In terms of the regional work, there are five more targets identified by these small intrusions, which may be explored over the next two years. The most advanced target after Marupa is Powis Hill, SE of the Golden Mile, with Haimarlli, Area C, Gold Creek and Caleb’s Workings as future targets.
The recent drilling from Marupa is early stage, and far off the
point when we could start estimating any resources and economic impact—but the market now knows that it is there, and we believe it will pay for it going forward. The importance of the initial success at Marupa is that is could be a brand new zone, to improve the economics of the Aurora area, but more importantly it confirms Guyana’s exploration model, and makes it more likely that Marupa and other target zones outside the Golden Mile could yield economic gold zones for a future mine. After adjusting for recent dilution and a stronger Canadian dollar, we estimate the NPV of the Golden Mile to be worth $6.47 per share, including fully diluted cash we estimate Guyana’s NAV to be $7.55. Recognizing that the Marupa zone is
likely to add ounces, as well as Rory’s Knoll at depth and further expansion of the Aleck Hill zone, we are applying a 1.5x multiple to this estimate before adding the fully diluted cash (approx. $1.00 per share) to derive a new target of $10.50. We are increasing our recommendation to Buy from Speculative Buy because we believe the risk profile is dropping dramatically for Guyana.
Its deal with the IMF earlier in the year and initial positive metallurgical testing has lowered technical, social, geopolitical, and financial risk (when it comes to debt financing much later on). The fact that the deposit is already among the largest new discoveries in the recent gold cycle (3-4 MMoz today we estimate) and has several more targets including Marupa that have demonstrated economic potential, makes development of this asset into a mine extremely likely. |
