Border Coal Beds Start To Develop For Goldsource

VANCOUVER — A steady stream of coal intercepts is helping Goldsource Mines’ (GXS-V, GXSFF-O) share price regain some ground, though it remains far below the dizzying heights it reached last summer.

After the junior’s drills inadvertently hit coal at its Border property in Saskatchewan, some 50 km north of the town of Hudson Bay, in April, a short summer drill program started to test the discovery area. Eleven holes hit coal in what the company dubbed the Durango coal seam, returning coal intercepts on average 20 metres thick starting roughly 80 metres below surface.

Now a winter drill program is punching close to 60 holes into the ground to test the extent of the occurrence as well as probing other targets on the property exhibiting similar geophysical signatures. And the results are encouraging.

The longest intercept to date came from the discovery area, which is now called the Chemong sub-basin. To follow up on the 28 to 41-metre coal intercepts from the four holes already drilled at Chemong, Goldsource planned a series of five angled holes from the summer program drill pads. Hole 40, which was drilled from the site of hole 3, but angled 10 north, returned 115.7 metres of combined dull to bright coal within a 132.6-metre intercept. Then, from the same setup but angled 250 west, hole 34 cut 72.9 metres of continuous coal.

And two 2.5-km stepout holes, one to the south and one to the west, returned significant hits. Hole 22 hit 47 metres of dull to bright coal with minor parting and hole 20 returned 50.9 metres of the same description.

Calling a coal intercept of more than 100 metres “stupendous,” Goldsource president Scott Drever said the company aims to drill the area in sufficient density for a resource estimate.

In addition, some of the recent hits at Chemong show one or more limestone beds above the coal. In the summer program, Goldsource directed its drillers to stop when drills hit limestone, which was thought to underlie the coal bed. As such, the company is re-drilling four holes that were halted without hitting coal, in case the holes were simply stopped prematurely.

In the Pasquia sub-basin, 3.5 km northwest of Chemong, Goldsource hit coal in each of seven stepout holes drilled to follow up on two holes from the summer program that returned coal intercepts 23.4 metres and 36 metres long. The best step-out results came from hole 37, which cut 43.3 metres of coal, and hole 30, which returned a 34.8-metre intercept as well as a 21.4-metre hit. In addition, hole 45 cut 29.2 metres of coal and hole 46 hit 25.8 metres of coal.

And Goldsource’s efforts to identify coal-bearing zones using geophysical data seem to be paying off. Some 7 km south of Chemong, the company made a new coal discovery in the Split Leaf sub-basin, where hole 41 returned 25.5 metres of continuous dull to bright coal within a 35.3-metre intercept, including partings, starting 128 metres down-hole. Nearby, hole 39 hit 10.6 metres of coal starting 103 metres below surface. The Split Leaf sub-basin is open in three directions.

Goldsource currently has two drill rigs turning at Border. One is dedicated to testing the new zones to the south, including Split Leaf. The other continues to work in the Chemong area.

Drilling for diamonds in Saskatchewan in April, Goldsource instead hit coal. More specifically, two drills 1.5 km apart returned 25 metres of coal starting at the same depth. Analysis determined the coal was high-volatile bituminous C and subbituminous A, marking the first occurrence of a significant bituminous coal seam in the province.

By June, the company’s share price had gained 6,000%, peaking at $19.60. The meteoric rise did not last long — by September it had fallen back to below $3. But Goldsource used the craze to raise $18 million, giving it the funds it needed to drill-test 176 coal permits covering 1,350 sq. km.

Of late, Goldsource’s share price had sunk to $1, but the steady stream of drill results recently lifted it as high as $2.40. The junior has 19 million shares outstanding.