Greatland Gold brings in larger partner to carry flagship project Ernest Giles in Western Australia into the next stage.
We are hearing very positive vibes that GGP have now secured a major partner to fast Track Ernest Giles.
Greatland Gold commencement of an aggressive drilling campaign at Ernest Giles, combined with more work at Warrentina, should generate plenty of positive newsflow in the weeks and months ahead and keep Greatland’s investors interested. Watch this space.
This year should be a pivotal year for Greatland Gold, according to chief executive Callum Baxter.
The company is currently trialling different types of geophysics to see which one is more appropriate for the continuation of target definition on its Ernest Giles gold project in Western Australia.
A four-hole programme of reverse circulation drilling carried out last year confirmed the presence of a gold mineralised system, with intercepts running as high as one metre at 1.28 grams per tonne.
That work has lead, which identified a Greatland already has a number of targets identified at Ernest Giles, but the plan now is to supplement those with further work, with a view to putting together a drilling campaign in the second half of the year.
“With a positive outcome we’d have a very attractive project to attract in a partner”, says Callum. “Or to convince the City that it’s worthy of further investment.”
Greatland doesn’t need to raise any further funds in order to be able to get the drills turning later in the year, though Callum does concede that if the targets look good enough and the timing in terms of market conditions look right, then a raise might be on the cards to allow for an extended drill programme.
Time will tell, but the potential for big upside is certainly there. “The project is quite unique for such a small company”, says Callum. “We have a very large area in a very prolific gold producing region. We’re hoping to find a large new gold project.”
Not that Ernest Giles is the only project Greatland has on the go.
Also high up on the to-do list is Warrentina in Tasmania. Warrentina was also the subject of exploration work last year, the results from which are still coming in. The latest results, delivered in February, have been fairly encouraging, and included four metres at 8.7 grams per tonne from a depth of 72 metres, and 28 metres at 2.31 grams, from a depth of just eight metres.
“Warrentina has consistently produced some good numbers for us”, says Callum. “There are currently some results outstanding that should be out in April, then that will be it from last year’s drilling.”
The question then becomes: which project will benefit from immediate follow-up work?
“Once we finish working on the Ernest Giles targeting”, says Callum, “we would have to work on our focus to decide whether we work towards drilling on Warrentina or Ernest Giles first in the third quarter,”
A great deal hangs, therefore, on the results of that impending geophysics programme, although Callum is keen to stress that both projects will get their fair share of attention over time. The issue is simply one of prioritizing the spending of what is by necessity a fairly limited exploration budget.
With that in mind, Greatland recently decided to share the burden on another of its projects, Lisle, also in Tasmania. Privately-held Tamar Gold, which holds 1,600 square kilometres of tenements in Tasmania in its own right, will take 75 per cent ownership of Lisle in return for a spend of A$500,000 over a four year period and two million shares.
Exactly what work Tamar plans to do at Lisle isn’t clear, but the minimum spend in the first year is A$50,000, and the great benefit from Callum’s point of view is that Greatland is now free to concentrate on Warrentina and Ernest Giles.
“It frees up Greatland’s management time”, he says.
So all eyes now turn to the impending decision on Ernest Giles. Here, Greatland certainly has plenty to get its teeth into. The project comprises three contiguous tenements over 965 square kilometres of ground and covers two buried Archean greenstone belts on the eastern end of the famous Yilgarn craton.
It’s pretty remote, but not totally beyond the pale – 200 kilometres to the south lies the five million ounce Tropicana discovery of AngloGold, a resource which lies beneath between 20 and 40 metres of overburden.
Whether Greatland can come up with anything quite so spectacular remains to be seen, but Callum is clearly optimistic about Greatland’s chances. “Success in early exploration could generate a re-rating”, he says.
And that’s undoubtedly true, even in spite of the recent weakness in the gold sector. Greatland’s shares have not been immune, is a long way down from the highs of last summer.
But the build up to and then commencement of an aggressive drilling campaign at Ernest Giles, combined with more work at Warrentina, should generate plenty of positive newsflow in the weeks and months ahead and keep Greatland’s investors interested. Watch this space.
A gold deposit south of Devonport has strong potential for mining.
Parts of it have six times the gold grade that the Henty mine has recently produced.
The Firetower deposit has so far been defined as 400 metres long with a width of up to 80 metres.
Drilling to date had found gold grades of up to 30 grams a tonne, Henty Gold Mine operator Unity Mining Limited said in its 2012-13 annual report.
The Henty mine produced at a grade of 5.3 grams a tonne over the past financial year.
Mined and current resource at Henty cover a much bigger area.
The overall Firetower project covered 265 square kilometres and had similar rocks to those at Henty, the company said is a recent report for a mining conference.
The project comes under an agreement between Unity and London-listed Greatland Gold.
The agreement would allow Unity to earn up to 75 per cent from the tenements in return for spending $7 million in two stages.
Unity is also continuing exploration efforts at Henty, on the West Coast.
It will focus exploration spending on resource extensions at its Read Zone.
Unity made a gross profit of $3.9 million for 2012-13.
The Firetower area is about 35 kilometres from Devonport.
Greatland Gold is an exciting, yet prudently-managed, gold explorer. The group has already shown its ability to target and explore quality resources with encouraging results; the “rabbits out of the hat” so far include two potentially valuable farm-in agreements, with two other projects showing promising early-stage drill results. One of these, Ernest Giles, in our view has been overlooked by the market. We would strongly suggest that investors acquaint themselves with the Greatland story; the group is currently small, but appears well-managed, cautious and in possession of some potentially highly attractive assets.
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