Most investors enter the junior gold market seeking the elusive “ten-bagger.” Most of them leave disappointed.
But in less than a calendar year many patient investors in Great Bear Resources Ltd. (TSXV: GBR) have been rewarded with those kinds of returns – and more.
On Aug. 15 2018 Great Bear Resources shares were trading at 50¢. As of mid-August 2019 shares in the plucky gold junior had topped $5.60. The only question is: What’s left in terms of shareholder value?
Great Bear Resources President and CEO Chris Taylor believes that question will be answered via the drill bit.
Taylor says the company will drill another 50,000-60,000 metres through the end of the year as part of its 90,000-metre 2019 drill program at its flagship Dixie Project near Red Lake, Ont.
Great Bear Resources expects to surpass those considerable drilling numbers next year through a combination of step-out and infill drilling. As of mid-July the company had more than enough cash to pursue its goals with $20 million in the treasury ($28 million partially diluted).
“(Drilling) will eventually produce a resource. We are just not there yet. It’s very much early stage work on the new zones that we keep finding,” Taylor says.
The company has found four mineralized gold zones to date: Dixie Limb, Hinge, Bear-Rimini and Yuma, in that order.
After some promising intercepts at Dixie Limb, including 6.6-metres running 10.58 grams gold per tonne in hole DL-050 and 10.4 metres grading 16.84 grams gold in hole DL-005, the junior found its breakthrough at the Hinge Zone.
In September 2018 Great Bear surprised the market with a 7-metre interval on Hole DHZ-004 on the Hinge Zone, which intersected an eye-popping 68.76 grams gold per tonne. The discovery re-rated the company.
“We had people telling us ‘you don’t need to go find the zone because you have got the zone in hand. Just drill it off and that will provide the valuation for the company,’” Taylor recalls. “If we had decided two years ago to hunker down and just do a resource estimate on Dixie Limb, the original zone that was discovered by Teck in the 1980s, we wouldn’t be even having this conversation. We would have been another company with a one-zone project and probably not capturing the imagination of the market.”
Taylor, meticulous by nature and a structural geologist by training, joined the company in 2009 as Vice-President of Exploration. A year later he was named president. He respectfully listened to the pundits yet continued to drill.
“It’s an exploration and discovery story, it’s not a definition story – yet,” Taylor says.
The primary mineralized gold zones at Hinge and Dixie Limb resemble the gold-hosting geology typical of the Red Lake district – high-grade, quartz vein-hosted gold in volcanic rocks controlled by a fault structure.
“Dixie Limb and Hinge are the types of deposits people are familiar with in Red Lake; vein-hosted, with really nice gold values in those veins and they tend to be – from what we’ve been showing in our drill data – continuous to depth,” Taylor says.
The Bear-Rimini Zone, about 2 km northwest, was found along the LP Fault, roughly 18 km of which is controlled by Great Bear Resources. The high-grade gold at Bear-Rimini is disseminated in what appears to be in porphyry-type or crystal tuff rock formations.
“The gold was disseminated in that rock body and that was really unexpected given the high grades that we saw. And that means it’s basically a new style of gold mineralization for the Red Lake district,” Taylor explains.
He adds: “What people really need to understand it’s two types of gold systems sitting beside each other on the same property.”
Taylor says the company is currently researching various major Canadian gold deposits in search of analogs to the new Bear-Rimini and Yuma discoveries, but that such shallow intervals of disseminated high-grade gold mineralization are very rare. He expects there will be an update early this fall.
Hole DNW-011 at Bear Rimini hit 14 metres running 12.33 grams gold per tonne at 71 metres below surface. Another 4.6-metre interval on the same hole returned 30.9 grams gold.
At the Yuma Zone, a 1.4-km step-out southeast of Bear-Rimini, was discovered by assaying unsampled core from historical drilling. Great Bear Resources drilled holes DC-12-07 and DL-03-10 again. The results have yet to be published.
Ongoing exploration work at Bear-Rimini and Yuma is being done with the aid of geologists Crystal McCullough and Rick Greenwood of Rimini Exploration and Consulting. Both worked underground at the former Goldcorp’s (now Newmont Goldcorp) mines in the area and had never seen high-grade gold disseminated in these types of rocks in the Red Lake area.
Great Bear Resources Vice-President of Exploration Bob Singh is also familiar with the camp, having played a key role in the discovery of the Newman Todd gold project at the western edge of the district. Singh was also instrumental in Great Bear’s acquisition of the Dixie project.
The success of Great Bear Resources has led to a considerable ownership stake by Red Lake stalwart Rob McEwen and his company, McEwen Mining. Together they own about 12.5% of the gold junior.
All told, institutions own about 25%; fully diluted Great Bear Resources has 50.6 million shares outstanding.
Taylor says none of the gold found to date is more than 3 km from a highway in one of the most mining friendly jurisdictions in Canada. Red Lake is also home to many experienced miners, many of whom have seen several mines reach production in the district.
“Any one of these four zones we have found on the project could make a junior mining company. But we have four of them altogether on one project and we’re just getting going,” Taylor says.
— The preceding Joint-Venture Article is PROMOTED CONTENT sponsored by Great Bear Resources Ltd. and compiled in cooperation with The Northern Miner. Visit www.greatbearresources.ca for more information.