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GGG Resources: Westhouse bullish on Bullabulling, sees another 'great year'

Last updated: 10:45 20 Dec 2010 GMT, First published: 11:45 20 Dec 2010 GMT

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GGG Resources (LON:GGG) is set for another great year in 2011, according to Westhouse Securities analyst Mark Heyhoe.

The company’s primary asset is the Bullabulling gold project in Western Australia. A three-rig resource drilling programme is currently underway at the joint venture project.

The analyst note highlighted that GGG, and its JV partner Auzex Resources (ASX:AZX), plan to start production in Q3 2013, at a rate of 100,000 ounces of gold per year.

Heyhoe believes that Bullabulling’s resource may have doubled in size by then.

“We recently visited GGG’s 50%-owned Bullabulling project in Western Australia and were struck by the fact that the size and scope of the project appear far greater than the current 1.98 million ounce inferred resource suggests,” Heyhoe said.

“Most of the current resource comes from only 2.2 kilometres of the 6 kilometres of known mineralisation and recent drilling has confirmed further mineralisation beneath the 120 metres depth limit to the current resource model.” 

He adds: “The recent increase in estimates of rock density from 2.6 to 2.9 should give at least an 11.5% increase in the resource by itself. 

Heyhoe emphasised that with a resource upgrade and reclassification due in H1 2011 and a full feasibility study expected in Q4, "2011 looks like being another great year for GGG resources."

He rates GGG as a buy with a 51 pence target.

 

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