Great Bear Resources (GBR.V) saw its share price boosted yesterday after announcing the company had discovered three new gold zones along the LP Fault: the Yauro zone (a combination of the names of the previously discovered Yuma and Auro zones), the Viggo Zone and the so-called North Fault.
The Yauro zone didn’t steal its name as this new discovery is located right in between the Yuma and Auro discoveries. The Yauro zone appears to be independent from these two other zones as the two holes (which were drilled 125 meters apart from each other, so this discovery does seem to have some size) encountered multiple layers of high-grade gold mineralization. With 37.4 meters of 5.14 g/t including 18.2 meters at 10.32 g/t (indicating the remaining 19.2 meters has an average grade of just 0.23 g/t gold, so we should really just look at the 18.2 meters of high-grade gold mineralization) in hole 36 and even more impressive results like 6 meters of 16.6 g/t gold followed by 1.7 meters of almost 36 g/t gold and 25.3 meters containing 5.6 g/t gold in hole 37. All three intervals were encountered between a down-hole depth of 68.5 meters and 214 meters which makes this a really intriguing drill interval.
Looking at the cross section of these intervals, we see two obvious things. First of all, it looks like a deeper hole could show even more continuous mineralization and secondly, due to the angle of both holes pretty much all the high-grade intervals are located within 175 meters from surface, creating optionality for Great Bear. The Yauro discovery could technically be mined using an open pit.
Yauro is by far the most interesting part of the Great Bear update, but we should also acknowledge the Viggo zone where the assay results are a bit less spectacular but were important to prove the continuity of the gold mineralization as the strike length of the LP Fault Zone has now been extended to approximately 4 kilometers. If anyone needed any more proof of how large the mineralized system at the LP Fault could be, there you go. Five holes were drilled along three recon drill fences along the projected trace of the LP Fault, and all five holes did encounter gold mineralization.
It sounds like Great Bear is planning to step out even further as it’s referring to another interesting zone approximately 1.3 kilometers further away towards the southeast.
And last week, Great Bear tried to entertain its shareholders by announcing its intention to create a SubCo which will hold a 2% Net Smelter Royalty on the Dixie project. Great Bear didn’t provide a lot of details (there’s no record date, there’s no timeline on if and when the SubCo will be spun off to the shareholders,…) so it looks like Great bear is just considering its options in case another company comes along and wants to acquire the Dixie gold project. Declaring its ‘intention’ to spin off a 2% NSR doesn’t mean the company can be forced to effectively go through with the spin-out arrangement. Even if another company would make an offer on Great Bear, it could easily make the offer subject to Great Bear not spinning off the 2% NSR.
Disclosure: The author has a long position in Great Bear Resources. Great Bear also is a sponsor of the website.
