Great Basin active in South Africa

Hunter-Dickinson-led Great Basin Gold (GBG-V) has tabled a new measured resource estimate for the Southeast zone of Area 1 on the northwestern portion of the Burnstone gold property, 80 km southeast of Johannesburg, South Africa.

At a cutoff grade of 0 gram-cm per tonne, measured resources are pegged at 4.1 million tonnes running 18.2 grams gold per tonne for more than 2.4 million contained ounces of gold. When the cutoff grade is boosted to 350 gram-cm per tonne, measured resources slip to 3.9 million tonnes at a grade of 18.4 grams gold. The new tonnages are marginally higher than previously estimated indicated resources, whereas the grades are slightly lower.

The company notes that the use of gram-cm cutoff grades is standard practise on the prolific Witwatersrand basin, and reflects grades over practical mining widths.

The new resource figure, which covers less than a third of Area 1, is based on 39 drill holes and 121 deflections, including 12 new holes and 32 deflections. The latest holes are part of an ongoing, 20,000-metre program of infill drilling launched earlier this year.

The company’s drilling has closed drill spacing to about 350 metres, well below the 800-to-1,000-metre average on the Witwatersrand.

Selected reef intercepts include the following: 18 cm running 18.3 grams gold per tonne in hole 1; 18 cm grading 42.9 grams gold in hole 5; 35 cm averaging 22 grams gold in hole 7; 1 metre grading 19.7 grams gold in hole 8; 60 cm of 22.3 grams gold in hole 17.

The remaining holes returned reef intervals 9-53 cm in length and grading 0.1-5.6 grams gold. Great Basin says its drilling has confirmed the reef at depths of 250-400 metres, reflecting the uplifting forces of a series of fault blocks. In the north and northeast portions of the property, the reef lies around 1,000 metres below surface, which is typical of other on the Witwatersrand.

Area 2, about 16 km to the southeast, appears to be situated along the same series of fault blocks and is home to an inferred resource of 24.3 million tonnes running 14.7 grams gold. The estimate is based on nine drill holes.

Drilling is continuing on the rest of Area 1, in anticipation of engineering and feasibility studies later this year. A resource estimate for the entire area is due by year-end. The company also plans a US$4.4-million program of engineering, seismic surveying, and permitting and environmental work on Area 1.

In addition, drilling will be carried out at Area 2 and several other prospects on the 400-sq.-km property.

“We haven’t done any work in Area 2 yet, but based on Southgold’s work, we believe this is a pregnant area as well,” said David Copeland, Hunter-Dickinson’s director of projects, who spoke to The Northern Miner on-site earlier this year. “There is a third, shallower almost sub-cropping area that is developing to the southeast of Area 2, so ultimately I believe we’ll have Areas 1, 2 and 3. This is a large system, in excess of twenty kilometres.

“We’re defining a series of braided sub-channels that are moving from the northeast to the southwest. We’re definitely in those channels, and getting good results.”

Gold mineralization at Burnstone is hosted by the Kimberley reef, a 30-to-100-cm-wide conglomerate (averaging 40 cm at Burnstone) that has surrendered more than 120 million ounces of gold to other mines on the Witwatersrand basin. All told, the basin has yielded some 1.4 billion oz. gold.

A Southgold scoping study suggests Burnstone could support a single-shaft mine, from which would be produced 2,500 tonnes of ore per day. On an annual basis, this would translate into 144,000 oz. gold, with the mine life pegged at 24 years. Total cash costs are estimated to be US$174 per oz.; capital costs, US$55 million. Startup would occur in 2006.

At a gold price of US$300 per oz., the project has a net present value of US$96 million (at an 8% discount) and an internal rate of return of 29%. When the price of gold is boosted to US$350 per oz., the net present value jumps to US$151 million (at an 8% discount) and the internal rate of return hits 39%.

The project is near a major highway and connected to several roads leading to the village of Balfour, immediately to the southwest. The national power grid and two rail lines also cut through the property. Great Basin expects site facilities, such as a tailings dam and shafts, would be placed some 6.5 km from Balfour.

Great Basin stands to take an 80% stake in Burnstone by acquiring privately held, South African-based Southgold, which holds the right to acquire the property subject to a 20-26% sale to Tanter Investments, a South African black empowerment group.

In early May, Great Basin paid Southgold a first payment of US$2 million in cash, 10 million shares, and 5 million warrants exercisable at US75 for one year. To complete the deal, Great Basin needs to issue another 11 million shares and 5.5 million like-priced warrants by the end of January 2004.

Meanwhile, another junior in Hunter-Dickinson’s stable, Anooraq Resources (ARQ-V), has tabled results from two more holes on its Rietfontein farm, 350 km to the north on the northern limb of the fabled Bushveld igneous complex.

African Minerals sank the holes in 2002 as part of its obligation to earn a half-interest in the 29-sq.-km Rietfontein farm. The results were only recently delivered to Anooraq.

Hole 27 returned 106 metres (from 43.2 metres below surface) grading 1.1 grams platinum-palladium-gold (PGMs), including 25.6 metres (from 97.6 metres) of 1.64 grams PGMs, and 16.8 metres (from 156 metres) of 1.56 grams PGMs. The intervals also include between 0.2 and 0.8% nickel, and 0.2-0.6% copper.

Hole 29 yielded 93.4 metres (from 47 metres) averaging 1 gram PGMs, 0.25% nickel, and 0.3% copper, including 45.8 metres (from 78 metres) running 1.33 grams PGMs.

To earn its stake, African Minerals, a private affiliate of Robert Friedland’s Ivanhoe Capital, must spend at least $1.5 million on exploration.

Some 36 holes previously sunk by American Minerals on Rietfontein returned similar results.

The holes targeted the Platreef pyroxenite horizon, which straddles Rietfontein and African Minerals’ adjacent Turfspruit farm. The horizon hosts intervals of disseminated, net-textured and massive sulphides averaging 1 gram combined platinum-palladium-gold per tonne plus nickel and copper.

So far, drilling has outlined mineralization over a strike length of 1.4 km. The zone dips at 30-70 to the west, averages 150 metres in width and extends vertically 50-250 metres below surface. The platinum-to-palladium ratio is about 0.65, and the platinum-to-gold ratio is around 3.

American Minerals is reportedly busy delineating some 1 billion tonnes exceeding 1 gram PGMs plus gold on its Turfspruit farm.