Goldrush Resources: drilling in Burkina Faso may ignite re-rating

Goldrush Resources (TSX-V:GOD) is currently focused on gold exploration in Burkina Faso where it is developing a number of very promising early stage exploration projects, and is mounting a substantial development program to build up gold resources at the Ronguen Gold Deposit. Additional exploration programs are underway over numerous targets located on a very prospective 20 kilometer strike line that encompasses Ronguen. 

Goldrush owns 5 8 permits covering 845 km², all located within the Birimian Greenstone Belts that are found across Burkina Faso, and have a history of prolific gold production. The country hosts at least 10 deposits containing in excess of 19 million ounces of gold found on these greenstone belts that are currently producing or are under development. The largest of these deposits is at the Esskane Mine with 5.3 million ounces, which is operated by Iamgold (TSX; IMG, NYSE: IAG). 

Burkina Faso has had very little modern exploration carried out on its greenstone belts and can be compared to exploring Canada one hundred years ago. The Burkina Faso authorities are keen supporters of modern mining in a country that is safe, stable and poor and has few sources of foreign earnings. The government has already permitted 6 new mines in the last 4 years and that number is expected to grow significantly. 

Goldrush’s most advanced project is located on the Kongoussi 1 and Tikare Permits which cover an area of 383 km² and are located 92 kilometers by paved highway north of Ouagadougou, which is the capital of the country. The Kongoussi 1 permit contains the Ronguen Deposit which has an NI 43-101 compliant Inferred Resource of 5.90 million tonnes at 1.31 g/t for 249,000 ounces of gold. This estimate was prepared in 2008 and it is apparent from recent drilling and technical work carried out on the permits that the size of the resource could grow very substantially both from within and around the deposit and at satellite deposits in its vicinity. There are a number of other gold resources that range in size of 1 to 2 million ounces that lie within 100 kilometers of the property and are indicative of the potential that may be unlocked. High River Gold (TSX: HRG), which has had a long term relationship with Goldrush has a one time buy back right for 50% on the project.

The Ronguen Deposit occurs north of a south dipping thrust fault within a thick zone developed in fine grained graphitic sedimentary rocks intruded by diorite. The gold mineralization is associated with arrays of quartz-carbonate veins and disseminated and veinlet pyrite developed within the major south dipping brittle-ductile deformation zone.

In mid 2010 the company completed 12 core drill holes into the deposit, and down dip, that doubled the depth of the defined resource from 80 meters to up to 160 meters and it remains open at depth. A second program of 12 Reverse Circulation (RC) holes for 1,484 meters confirmed additional depth extensions and additional drilling extended the strike length of the deposit. At this stage 21 drill fences had been completed at a spacing of 40 to 80 meters, over a distance of 1,500 meters, covering significant and shallow gold intersections that appear to be amenable to open pit mining. 

Drilling in the central part of the deposit discovered a near surface supergene or enriched gold zone. Drill hole RC96 hit 7.63 g/t over 16 meters and 3.17 g/t over 22 meters, and drill hole RC99 hit 3.10 g/t over 34 meters. This near surface ore block carrying values in excess of 3 g/t has potential to become a high grade starter pit. Recent Rotary Air Blast drilling up-dip on this zone confirmed significant gold values.

Recent trenching on the northeast side of the deposit has extended the mineralized zone into a previously untested area, where 3 trenches for 315 meters found significant gold values. The easternmost trench of 104 meters cut two gold zones including 0.90 g/t over 15.2 meters and 1.45 g/t over 22.8 meters including 2.09 g/t over 10.8 g/t.  A second trench 40 meters west of the first trench over 200 meters cut 2.99 g/t over 3.4 g/t. This northeast section now becomes a high priority target for a planned Reverse Circulation drilling campaign, which has been delayed but is expected to get underway in mid February. This will be a 5,000 meter program for 54 drill holes.

The Ronguen deposit is now confirmed over a 1.5 kilometer long strike line that is still open to both the east and west along strike and at depth, and contained within a deformation zone measured at 5 kilometers. Mineralization starts near surface and is open pittable mostly oxide ore. Goldrush intends to complete an updated NI43-101 Resource Estimate update in the second quarter of this year after completion of the next drilling campaign, which will also test several targets along a 20 kilometer strike line beyond Ronguen to both the east and west. Targets that have been previously identified across this line include Kilou, Badinogo, Loungo and the Saddle Zone.

A new deposit has also been identified 300 meters south of main zone called Ronguen South. Reconnaissance Rotary Air Blast drilling at Pouni, which is an artisanal mining site located 10 kilometers northeast of Ronguen discovered a shallow gold zone, grading 1.94 g/t over 8 meters, at a depth of 12 to 20 meters. This zone has been allocated 1,000 meters of drilling in the upcoming drilling campaign.

Other projects include the Salbo Permit, which is located 60 kilometers north of the capital. The property abuts the High River Bissa Project, which carries a Measured and Indicated Resource of 2.65 million ounces of gold and an Inferred Resource of 218,000 ounces. Salbo contains 3 mineralized trends, with the main trend measured at a length of 2 kilometers. This trend has reported grades as high as 30 g/t gold from surface samples and contains 2 artisanal mining sites. Two additional smaller trend lines report grades of up to 8 g/t and 10 g/t. Ground geophysics and drilling are planned on selected targets.

The Ouavousse Permit is located 120 kilometers northeast of the capital, where sampling over a 10 kilometer area shows high value gold values from multiple locations, including samples of up to 9.25 g/t gold, and trenching results of 1.58 g/t  gold over 5 meters. A major trend line at Poessin has 500 artisanal miners digging for near surface high grade gold. The Bougou 1 permit, which is 200 kilometers northeast of the capital, abuts the High River Taparko Mine which has a Measured and Indicated Resource of 758,000 ounces of gold. Both permits are set for technical studies and Rotary Air blast drilling over mineralized trends.

In a recent news release dated February 2, 2011 Goldrush announced that it has optioned 3 new Burkina Faso exploration permits two of which, Gonaba-Est and Nakiambouri, are in the immediate vicinity of Mt. Isa Metals Ltd.’s new and exciting gold discovery on its Yactibo project.  In fact, Nakiambouri and Yactibo share a common boundary.  Similarities between the two areas include the same geological rock sequences and extensive artisanal mining activities, which are an excellent pathfinder to gold mineralization.  One artisanal mining site on Nakiambouri more than 100 artisanal miners have been in continuous gold production for over 9 years.

Goldrush’s third new permit, Liki, islocated in north central Burkina Faso along the Bouroum-Yalgo Greenstone Belt that hosts the Taparko Gold Mine of High River Gold Mines Ltd. (TSX:HRG) ( located
approximately 80 kilometers to the southwest) and the Inata Gold Mine of Avocet Mining PLC
(located approximately 55 kilometers to the northwest).

Goldrush is on the cusp of unlocking the potential around its Ronguen gold resource and on its other highly prospective permits that have seen very little exploration activity.  The company carries a market capitalization of only $29 million. The Canadian peer group of Burkina Faso explorers, who have met success in that country, carry much heftier valuations, which include  Volta Resources (TSX: VTR), Orezone Resources (TSX: ORE), Riverstone Resources (TSX-V: RVS); and Cluff Gold (TSX: CFG).