“Drill It And You Will Find It”: Frank Basa’s Motto At Gold Bullion Developments Is Well Borne Out By The New 2.6 Million Ounce Resource At Granada

Frank Basa in the field

It hasn’t been long since Gold Bullion Development Corp. announced its maiden resource at the company’s flagship Granada gold project, located on the famous Cadillac trend in Quebec.

In fact, it was only seven months ago that Frank Basa, president and chief executive, reported an initial 1.5 million ounce NI 43-101 resource there.

At the time he confidently and concisely explained the company’s strategy at Granada: “drill it and you will find it”.

Now only a few months later, Frank’s strategy has been borne out, and in no small way. A resource update in November hit the upper end of his 2.4 to 2.6 million ounce resource target.

Not only that, Frank believes there’s plenty more where that came from, and an opportunity to boost the grades to boot.

Following the highly successful exploration program, which included 80,000 metres of drilling, the Granada gold project now hosts a NI 43-101 resource of roughly 2.6 million ounces of gold.

What’s more, the selected base case in-pit measured resource contains nearly 25 million tonnes grading 1.01 grams per tonne for 811,300 ounces of continued gold as well as 354,600 ounces in the indicated category, and another 11,100 ounces inferred.

Unsurprisingly, Frank is well satisfied with progress so far. But he’s aware that better grades would make Granada far more attractive. “What we’ll do moving forward is we’ll prove it up as a higher grade deposit”, he says.

While the in-pit grade of one gram per tonne is by no means out of the question for development as far as low grade deposits go, Frank does not want to develop a project on the raggedy edge of economical viability.

“I think you can do a one gram deposit currently”, he says. But, in the event the market turns and gold goes down to US$1,000 or even US$800 an ounce five to ten years down the road, he adds, it’s better to have plenty of built in margin.

SGS Canada, Gold Bullion Development’s contractor at Granada, has duly been put to work and, based on the resource estimate information and the deep hole program interpretation, SGS found that the possible extensions to the known deposit at Granada could well hold higher grade material.

“We did some deep drilling to confirm we can hit these structures”, says Frank. “We hit them and came up with an estimate looking at material in the three to four gram range for something like an extra one to two million ounces added to what we have now.”

With only 20 per cent of the mineralized structure at Granada drilled, an opportunity outside the areas currently being targeted by SGS, there’s still plenty of blue sky on offer.

“It doesn’t mean that we’ll have more than 4.6 million resource ounces but we have another 80 per cent to look at”, says Frank. “There’s other historical mines to the east and we haven’t drilled in that area yet.”

Even before they get to prove up more ounces at a higher grade, Frank and his team are planning to pull some of what they have proven up so far out of the ground in a bulk sample. It’s a strategy they’ve employed before with great success.

Soon after taking control of the project in 2006, the company conducted a bulk sample at Granada which, Frank reports, “basically paid for its self, plus it paid for the property, plus it paid for a lot of other stuff, plus it confirmed our grades so we came ahead with it.”

What Frank and his team found when they took the original bulk sample was a considerable improvement in real grade compared to the estimate in the previously non-NI 43-101 compliant, resource.

Roger Thomas, a director of Gold Bullion Development explains: “What’s not talked about in the resource estimate is that generally speaking our project has shown a consistent average of 30 per cent upgrade due to nugget effect. The drill grade was 0.8 of a gram and we pulled 1.62 grams.” It took Frank by surprise, he had no idea he was going to get that kind of a return, but it was a very profitable outcome.

Having had such success with the last bulk sample,  Frank and the Gold Bullion Development team have opted to take a large sample which, in addition to being illuminating as far as grade, is expected to provide the company with welcome cash flow in these depressed market conditions.

“It’s actually going to be a very large bulk sample”, explains Frank, “larger than most people are used to seeing, but it will confirm our grades and give us a high degree of confidence that the drill program we’ve done to date is meaningful.”

The added benefit of generating cash flow to curb equity dilution from financings is just the icing on the cake.

Following the bulk sample, it’ll be back to the drill bit to take aim at that 3.6 million to 4.6 million ounce target, and Frank is still every bit as confident as he was in April when he said “drill it and you will find it.”

To facilitate an accelerated drill program on the property, the Gold Bullion Development team has been upgrading the facilities at Granada, which now has the benefit of a large core logging facility and five core saws.

“The intent is to do 100,000 or maybe 200,000 metres more drilling”, says Frank, and that will take the project to a turning point.

“If a certain resource is hit, the company internally doesn’t have the skill set right now to put it into production if it becomes a massive multi-million ounce project”, explains Frank. “We’re comfortable up to three million ounces. We think a decision will be made next year on what to do – move forward or put it into production.”

In the meantime, there could be additional opportunity for the investors of Gold Bullion Development in the form of a spin-off.  Frank and his team currently have a project in the historic silver camp in Cobalt, Ontario which resides within Gold Bullion Development’s subsidiary company, Castle Silver Mines.

According to Frank, “the Cobalt camp is probably the world’s largest single silver deposit. Over its 20 year life they took something like 600 million ounces of silver out.” And Gold Bullion Development has properties here that have delivered grades as high as 6,476 grams per tonne silver over roughly 3.1 metres.

With an advanced exploration permit and an agreement with the local first nations in hand, Frank’s plan is to spin off the company, rewarding current Gold Bullion shareholders with shares in the new company along the way, and then to hit the road running to explore for silver, gold, platinum group metals, and cobalt.

“If the markets are good next year, it’s a spin off and we’ll accelerate the program at Castle similarly to how we accelerated our program at Granada”, says Frank. Next year should another exciting year for the company.