Granada gets interesting for Gold Bullion (November 29, 2010)

VANCOUVER — Gold Bullion Development (GBB-V) is hitting the best grades to date at its Granada gold project in Quebec as it explores the Eastern Extension of its LONG Bars zone.

Hole 55, collared 88 metres northwest of the discovery hole of the Eastern Extension, returned 356.6 metres grading 0.6 gram gold per tonne, starting at surface and including 40.5 metres carrying 4.05 grams gold. The Eastern Extension discovery hole hit 123.5 metres averaging 1.07 grams gold.

The hit in hole 55 represents the longest mineralized intercept at Granada to date. The core hosted gold in altered feldspar porphyry and quartz veining, which ended in conglomerate at a vertical depth of 175 metres.

“To get a result like hole 55 when we are still drilling for structure over an area that has received little historical attention is very encouraging,” said Gold Bullion’s president and CEO Frank Basa.

Gold Bullion started drilling at Granada in December 2009 and has already completed almost 30,000 metres. The property, which is 5 km from Rouyn-Noranda and 65 km west of Osisko Mining’s (OSK-T) Canadian Malartic gold mine, hosts an historic open-pit mine, with three old pits aligned along a west-northwest strike and a waste pile directly beside the pits. In the Phase I program, the company drilled 25 shallow holes focused northeast of the most easterly pit and every hole returned gold mineralization.

The easternmost hole of that program is what is now considered the Eastern Extension discovery hole, as it returned good gold mineralization from farther north and east than had ever been drilled. Gold Bullion immediately staked additional claims to the east, increasing its land position to 49 sq. km. The mineralized area from the past-producing pits to the Eastern Extension discovery hole became known as the LONG Bars zone, with LONG being an acronym for “lots of new gold.”

The company then integrated 26,000 metres of historical drill data with its Phase I results and in April produced a preliminary block model for Granada. The model outlines a mineralized system with the potential to host 2.4-2.6 million oz. gold along 600 metres strike, across 500 metres width, and to 70 metres depth. The block model does not include the Eastern Extension area.

Over the summer, Gold Bullion worked through a 25,000-metre Phase II drill program; as soon as it was complete the company kicked off Phase III, during which Granada will see another 50,000 metres of drilling. In Phase III drills will test the entire zone, including the Eastern Extension, to 450 metres depth.

Results are still pending from many holes from Phase II, including a series of holes 350 metres south of the Eastern Extension discovery hole. Results are also still outstanding from holes testing the northern half of the block model area, which is the western half of the mineralized zone and includes the historic pits. One hole into the northern area hit visible gold in quartz conglomerate just below the overburden.

In Phase III the company will work to test the area underneath the historic waste pile, which is being moved. One of two holes already drilled in the area returned visible gold at 145 metres depth.

Granada is a sediment-hosted, structurally controlled, vein-type system that has been intruded by a series of syenite feldspar porphyry sills and dykes carrying pyrite and arsenopyrite. The Cadillac fault crosses the northern portion of the property and is the source of multiple secondary faults that likely acted as mineralizing conduits.

Gold Bullion is well-funded to complete its large Phase III drill program, as the company recently raised $8 million by selling 14.8 million units at 54¢ apiece. Each unit comprised a share and half a warrant exercisable at 75¢ for one year.

Gold Bullion gained 3¢ on news of the results from hole 55 to close at 62¢, continuing a sustained climb from just 5.5¢ a year ago. The company has 130 million shares outstanding.