Gold Bullion’s first drill program hits gold at Granada

Vancouver – Junior explorer Gold Bullion Development (GBB-V) has hit promising widths of near-surface gold mineralization east of the historic Granada mine in Quebec, prompting the company’s share price to almost double.

Gold Bullion originally picked up the Granada property in 2006 to use the on-site mill, but after checking for lingering mineralization around the historic mine realized there was still significant gold potential. The company has since steadily increased its land holdings in the area. Now with a gold zone 750 metres long and 300 metres wide returning solid gold grades, the company says the potential scale of mineralization at Granada is already beyond what it envisioned.

Gold Bullion started its first drill program on the site in December. With the 25-hole, 2,800-metre program now complete, the company has determined that mineralization extends both west and east-northeast from the historic mine. The company named the area the LONG Bars zone, as in “lots of new gold bars.”

Hole 17, the most easterly hole to date, hit 99.2 metres grading 0.95 gram gold per tonne starting at 3.5 metres, and included 65.5 metres grading 1.21 grams gold. Hole 15, collared at the northern edge of the east-northeast extension and 103 metres from hole 17, cut 73.8 metres averaging 0.88 gram gold beginning 73 metres downhole. Hole 15 included several high-grade intercepts, such as 2.5 metres grading 19.98 grams gold and 0.8 metre grading 60.83 grams gold. Both holes 15 and 17 are in a previously unexplored area.

Roughly 300 metres away, at the southern edge of the extension, hole 8 intersected 51 metres carrying 0.93 gram gold from 17 metres below ground, and included 32.5 metres grading 1.27 grams gold. Close by, hole 6 hit 16.5 metres grading 1.22 grams gold, starting at 36 metres, and hole 12 returned 68.8 metres grading 1.07 grams gold starting at 16.2 metres, and included 25 metres at 2.6 grams gold.

Just to the east of the original mine site, the first hole of the program hit 61.7 metres grading 0.56 grams gold starting at 6.3 metres, and included 14.7 metres grading 1.6 grams gold. In the same area, hole 2 cut 32.5 metres grading 1.74 grams gold starting 15.5 metres downhole. Results are still pending from another 13 holes on the west side of the original pit.

Gold Bullion reports it has hit gold in every hole and mineralization remains open in all directions. The company is especially excited that mineralization in the east-northeast extension starts almost at surface.

“We found stuff we didn’t think was there,” said Gold Bullion president and CEO Frank Basa in a phone interview, “We were kind of pleasantly surprised.”

The drill program was designed to establish structure, not grade, according to Basa. The program skipped over a large chunk of the property that was subject to 26,000 metres of drilling in the late 1980s and early 1990s.

“We thought, you know what, that’s been drilled considerably, lets see what’s to the east and to the west,” said Basa. “This drill program was basically to define structure, basically how big this thing is.”

Basa said originally it was thought there were only two vein structures, but recent estimates put the number at nine. “And actually we stopped counting them because there’s so many of these that pinch and swell, they disappear and we’re not certain if it’s the same one reappearing”, said Basa. Instead the company is treating the east-west vein as one large wide trend, currently established as 600 metres long, 30 to 70 metres thick, and 150 metres in depth.

Granada is 6 km south of Rouyn-Noranda, along the Cadillac trend in the Abitibi Greenstone Belt. Like several other major mines in the area, such as Osisko Mining‘s (OSK-T) Canadian Malartic mine 65 km to the east, Granada hosts quartz vein mesothermal-type mineralization hosted sedimentary rocks and younger syenite porphyry dikes. Gold is also present in significant amounts within the iron-rich sulphized wall rock.

Gold Bullion acquired the property in 2006 and took a 142,000-tonne bulk sample in 2007, which returned an average grade of 1.62 grams gold. The company determined that a prominent zone of deformation, hydrothermal alteration and quartz-veining extends for at least five km around the old mine workings. The company has since increased its land holdings in the area from 71 hectares to 2,300 hectares. Basa explained that the company managed to acquire the millions in assets without raising much capital by “doing it against the bar,” meaning the property was paid for in gold extracted from the bulk sample.

Granada was first in operation between 1930 and 1935, but closed after a fire destroyed the surface infrastructure. The site remained dormant until Kewagama Gold explored it in the early 1990s and established an historic resource estimate of 280,000 oz. gold from a 500-hole drill program focused on a small footprint around the old mine workings. Kewagama later became insolvent and Mousseau Tremblay bought the property, producing 2,200 oz. of gold in 2006. Gold Bullion bought the property from Mousseau soon after.

The company plans on starting a new drill program as early as April, depending on financing, with the priority being to further extend the LONG Bars Zone northeastward and to look for other zones. Deeper drilling is also planned, as to date exploration has been fairly shallow.

“The preliminary results are better than we expected, and we’re just trying to figure out what’s happening here,” said Basa.

Basa said the company already had completed a feasibility study based on historic data and its bulk sample but decided to hold off on releasing the study until after completing further independent exploration. Gold Bullion’s drills have since revealed the potential scope of mineralization at Granada.

Gold Bullion’s share price moved up 7.5¢ on the news to close at 19¢, a new 52-week high. Over the last year it has fallen to a low of 2¢. The company has 81 million shares outstanding.