Great Bear's Huge Success
Sep 4, 2018
Great Bear Resources (TSXV: GBR) has been in the Maven Letter portfolio since December. That’s when I met with president and CEO Chris Taylor and heard one of the best exploration stories I had heard in a long time.
Chris and VP Exploration Bob Singh are experienced, sensible, and intelligent guys. They put this company together on their own during the bear market, assembling a highly prospective but underexplored land package in prolific Red Lake and putting it in a company with a very tight share structure.
Their first drill program at Dixie Lake had easily confirmed the high grades from limited historic work, which had been poorly recorded, and that gave Chris and Bob the confidence they were onto something. As importantly, the work supported their theories on how the gold came to be and where there might be more.
In December, when I met Chris, they were completing a small financing, just enough to do a small drill program. Drilling at Dixie Lake is very inexpensive – there is Tim Hortons exploration, and in the heart of Canadian gold country. I invested and offered it to Maven Premium subscribers.
That program again returned very high grade gold, as has subsequent drilling. And they are hitting gold not just in the main Dixie Limb zone but in multiple locations along the prospective geologic contact.
|The market took some note of Great Bear’s first few rounds of drilling but it wasn’t until the latest results that GBR shares soared. And for good reason.|
The hits – 26.9 g/t gold over 16 metres in one hole and 44.5 g/t gold over 7 metres from a second hole 15 metres deeper – came from the Hinge zone. GBR had pulled good gold from the Hinge previously, but not of this caliber.
This drill intercept is phenomenal. Red Lake can produce these kinds of hits, but not very often – and when they do happen, the discovery usually becomes something very significant. Think the High Grade zone at Goldcorp’s Red Lake operation, where the average grade is more than 2 ounces per tonne (62 g/t).
And Hinge is the perfect place to pull this kind of result. In my December writeup I noted that Dixie Limb looked very nice, with incredibly consistent high-grade gold hits along several hundred metres of strike and all within a few hundred metres of surface, but that the large unexplored prospective geologic contact was just as exciting. A big part of that excitement was Hinge – the best gold zones in Red Lake occur where prospective geologic contacts fold and that is precisely what happens at Hinge, where the contact doubles back on itself.
At this point Great Bear has:
The results from Hinge are very exciting, but the bigger picture is even better. Hinge has the potential to be the best part…of a very good Red Lake gold system.The consistency of Dixie Limb (where over 90% of holes have returned at least 3 g/t gold over at least one metre, a success rate almost unheard of in Red Lake), the fact that an absolutely huge 1.6 km stepout along the contact returned gold, the potential at the South Limb – these factors all contribute to making Dixie a very exciting project.
- Dixie Limb: high-grade gold along 2km strike and several hundred metres depth. Open in all directions. Widespread silica/sulphide replacement along structure and gold occurs in multiple rock units and is not restricted to a particular lithology or vein set (all of which suggests a big, strong system). Longer, lower-grade intercepts right at surface suggest potential for open pit to start.
- Hinge zone: incredibly high grades in two stacked holes roughly 100 metres below surface. Prime geologic setting for high-grade Red Lake gold. Open in all directions.
- Northwest Stepout: GBR stepped 1.6 km to the northwest along the prospective contact and hit 12.7 g/t gold over 1.7 metres. That is an immense stepout in Red Lake, where stepouts are often 15 metres. Another suggestion of the strength of the system along this contact, which begs the question of how many zones along the stretch hold good gold.
- South Limb: the contact folds back on itself at Hinge, which puts South Limb parallel to Dixie Limb only a few hundred metres away. Historic work returned gold from this area; GBR has not had time to explore yet.
And that project is in very good hands. Great Bear has a tight share structure and a focus on keeping costs low. The team is that ideal mixture of experience, smarts, and youth, with guidance from a strong board that includes John Robbins.
And now Rob McEwen will also be lending guidance. McEwan is the epitome of Red Lake gold exploration success (Goldcorp found the High Grade zone under his leadership) and he is investing $4.8 million, personally, in GBR. His gold company, McEwan Mining, is putting another $1.2 million into the raise. It’s a strong endorsement of the potential that a Red Lake veteran sees at Dixie.
The questions you all have is: is the stock a buy today?
It is always hard to invest in a stock that just tripled. Obviously I am very happy to own this stock at $0.30. That said, this has the potential to be a very big win. It could also falter, but the potential for this stock to keep going is real. So if you do not own any GBR yet, I would consider buying some today – but a small amount, with the intent to buy more if the price declines.
And a decline is very possible. This is exploration and not every drill hole is going to return almost an ounce of gold over 16 metres! That said, if a few more holes do return those kinds of numbers, this stock will soar again. Investors really want to own the next big discovery and this has the potential to become exactly that.
There are zero guarantees in exploration, but the record of success on this project to date is stellar and the potential is very significant.