The drilling results coming from GGG Resources’ (LON:GGG) Bullabulling project are very encouraging for a potential increase its resource, according to research by Collins Stewart analyst John Mcgloin.
GGG, and its joint venture partner Auzex Resources (ASX:AZX), revealed another set of strong drill results from the Bullabulling gold project in Western Australia.
Gold mineralisation was intersected in 58 of the 59 drill holes that were included in the results, which covered 18,000 metres of drilling.
This is the second batch of results from an ongoing drill programme, which is currently one third complete. Back in December, GGG gave the results of the first eleven holes.
"We are highly encouraged by the results to date which confirm the model of a large, low grade deposit with high grade zones,” managing director Jeff Malaihollo said.
The positive update sent the stock 5 percent higher on London’s AIM market. By mid-morning the shares were up 1.25 pence, changing hands at 25.75 pence.
The gold junior has made rapid progress since it got involved with Bullabulling almost a year ago. It is now a third of the way through a major drilling programme that is encouraging investors and analysts alike. One top analyst believe that results to date bode well for a resource upgrade later this year.
This morning, in a note to clients, Mcgloin said the latest results were very positive.
The analyst said: “More encouraging results from the infill drilling programme at Bullabulling not only continue to improve the confidence in the current resource model but also contain a number of impressive higher grade intercepts and, in some areas, show widths and grades better than expected.”
Importantly GGG told investors that it is on track to produce an updated and upgraded JORC resource estimate in the second quarter of 2011.
It said that so far the drilling results have improved management's confidence in the current resource model as well as the historic data.
Around a third of the results show greater grades or widths than Bullabulling’s historic results.
Furthermore it has found new zones of mineralisation, which account for about a quarter of the results. These new zones have been found both below and along strike from known mineralisation. The new zones include grades between 2.1 and 152 grammes per tonne gold with widths ranging from 1 metre to 39 metres.
“The main aim of the programme is to confirm the historical drilling data to upgrade the large low grade resource to the indicated and measured category under JORC”, Mcgloin said.
“In this light, the results have been very positive with 88 percent of the mineralised intersections either reporting in line or better than the current model. 35 percent of intersections returned better grades or widths than previously modelled with 26 percent of reported intersections showing new zones of mineralisation outside the current resource model.
“Both these points are very encouraging for a potential increase in the resource when updated.”
The analyst also stressed that there is a lot more to be done at the project.
“It is worth adding that the results of the programme to date are concentrated within a 2.2 kilometre zone around two existing pits at Bullabulling.
“Therefore, the group is yet to drill to depth the remaining 6 kilometres of the structure which previous studies have traced mineralisation (running 0.5 - 1.5 grammes per tonne) on 40 metre spaced sections for almost the entire 6 kilometre strike.”