GMV adds second drill to untested Guyana prospect

Vancouver-based gold explorer GMV Minerals (GMV-V) has two drills now turning at its never-before-drilled claim blocks in northwest Guyana. The company started drilling in early May and added the second rig in mid-June.

It expects to release the first assay results from its drill program in mid- to late July, assuming there are no major delays from Acme Labs in Georgetown.

GMV’s first drill program will consist of 25 holes testing a 3-km-long, 300-metre-wide arch-shaped geophysical anomaly it calls the ZEV showing. Each hole will be drilled to a depth of between 200 metres to 300 metres for a total of roughly 6,250 metres.

Three-dimensional pole-dipole, magnetic, induced-polarization and resistivity surveys were all conducted at ZEV, identifying an anomaly with high magnetic intensity, low resistivity and high chargeability trending east-west. GMV’s geologists, headed by vice-president of exploration Douglas Perkins, interpret the anomaly as lying approximately 120 to 150 metres below surface and extending to a depth of over 300 metres.

GMV has also just completed a 33,692-line-km fixed-wing airborne magnetic and gamma-ray spectrometry survey over the group of claims, which the company claims is the largest non-government airborne survey ever conducted in Guyana. It expects initial results from that program in early July.

The company acquired most of its Guyanese mineral claims in an arm’s-length transaction earlier last year with prominent Guyanese businessman Alfro Alphonso. One of Guyana’s major private gold producers and a prolific property vendor to Canadian mineral explorers as of late, Alphonso’s company mined approximately 60,000 oz. to 75,000 oz. of alluvial gold on the claims in 2009. GMV is now on the hunt for the alluvial gold’s hardrock source.

Other companies that have bought their principal claims from Alphonso in recent years include Sandspring Resources (ssp-v), Sacre-Coeur Minerals (scm-v), Guyana Goldfields (guy-t) and Otish Energy (oei-v). GMV has agreed to pay its vendor an enticing 9.07 million shares and $1 million cash over three years, as well as spend $5 million on exploration. As part of the deal, Alphonso was also appointed to GMV’s board of directors.

With Guyana becoming more and more popular with investors these days, and as the price of gold seems to spiral ever upward, junior resource companies have increasingly turned to far-flung jurisdictions such as Guyana in order to add some geological spice to their promotion. Shortly before making the move into Guyana, GMV had tried to make acquisitions for mineral properties in Ecuador, Manitoba, British Columbia and Ontario, usually cancelling a non-binding deal a few months after announcing it.

Having picked the right jurisdiction, the company’s share price has increased handsomely since acquiring its Guyanese prospects, with the stock rising to a high of 84¢ in February 2011 from a low of 10¢ last summer. The stock has since retreated to the 40¢ to 50¢ range, however, amid a general pullback in junior resource stocks.

New York-based investment fund Libra Advisors is the company’s largest shareholder with 13.55 million shares and 6.77 million share purchase warrants. Managed by Hindu New Yorker Ranjan Tandon, whose wife runs a Fortune 500 consulting company and whose sister-in-law is the chief executive officer of PepsiCo (pep-n), Libra has bought large blocks of private placement shares in a dozen or so Canadian-listed resource stocks in their mid-summer lows of 2010, including Sandspring Resources, Torex Gold (txg-t) and Revett Minerals (rvm-t).

GMV is jointly run by president and CEO Ian Klassen, owner of 948,340 shares, and chairman Alistair MacLennan, indirect and direct owner of about 1.7 million shares. While neither of the men can boast of any big exploration successes in the publicly traded resource sphere, both have had interesting careers outside of mineral exploration. Klassen is a former IR firm co-owner as well as past Chief of Staff of the Speaker of the Canadian House of Commons, whereas MacLennan has been chairman since 1986 of Helijet International, a private helicopter airline which operates a fleet of Sikorsky S76 helicopters throughout the Pacific Northwest.

The pair also runs Grande Portage Resources (gpg-v), an Alaska-focused gold explorer which last traded at 14.5¢.