Great Bear Resources (TSX-V:GBR) Ltd said it is about to start second phase drilling at its Dixie gold project in Red Lake, having now completed 440 holes, and its first phase work, at the LP fault to an average depth of 450 metres (m) over 4 kilometre (km) of strike.
In simple terms, the LP Fault at the group's flagship asset is a target with an 18 km strike length, which has been seismically imaged to extend to 14 km depth.
"109 of the 440 drill holes totalling over 40,000 metres are currently in various stages of assay progress, with results expected regularly over the next 2-to-3 months," said Chris Taylor, CEO of Great Bear in a statement.
READ: Great Bear Resources updates $45M exploration program at flagship Dixie project
"Maiden mineral resource estimate modeling of the first 450 metres of mineralization from surface of the LP Fault is underway and is expected to be published no later than first quarter 2022," he added.
Due to a regional forest fire, on July 21 this year, the Ministry of Northern Development, Mines, Natural Resources and Forestry (MNRF) issued a work suspension order for many constructions, mining and forestry related activities over an area, which includeed Red Lake.
Great Bear suspended drilling at the Dixie property on July 18, after its Phase 1 grid drill program was complete, and prior to the MNRF order being issued.
The Phase 2 drilling is expected to begin on or around the week of August 9, it told investors.
This work will comprise ongoing expansion drilling of the LP Fault below 450 metres depth and along strike, as well as any additional infill drilling of the upper 450 metres of the LP Fault that may be required after review.
There will also be expansion and infill drilling of the Hinge, Limb and Arrow zones, and testing of new regional targets at Dixie.
Great Bear has around C$83 million in cash on hand and is funded through 2022. In all, the company has completed 630 drill holes totaling 283,000m into all gold zones since beginning drilling at Dixie in the summer of 2017.
Reseach Capital repeats 'Speculative Buy'
Following the update, Research Capital Corp repeated a 'Speculative Buy' on the shares and a C$36 per share target price (current price: C$14.46)
Analysts noted that their estimate for the mineralized inventory at Dixie was around 9.6 million ounces of gold, of which 8.12 million are in the LP Fault zone.
"However, our estimate is based on a cumulative 3.82 km of strike (slightly less than the 4 km drill tested) and extends to 300 m to 400 m maximum depth. Therefore, we see potential upside as the resource will be calculated to a maximum depth of 450m," they noted.
"The company did not indicate if any resource estimate would be published for the Limb or Hinge zones which account for approximately 1.5 million ounces in our global mineralized inventory estimate. Overall, we see potential for the LP Fault zone resource to be better than our estimate, but it is not clear whether the resource estimate will extend beyond the LP Fault zone."
Research Capital analysts also highlighted that the Great Bear share price had been "under pressure lately" and they believe there is "significant upside for investors who enter at current levels".
Contact the author at giles@proactiveinvestors.com