This article is a sponsored feature from Mining.com.au partner Great Boulder Resources Ltd. It is not financial advice. Talk to a registered financial expert before making investment decisions.
The gold sector is poised to recover early in 2023 after the price of the precious metal was essentially flat in 2022.
While most mineral and metal prices have been widely forecasted to average slightly lower this year on a year-on-year basis, gold is expected to again shine somewhat, particularly if interest rates are paused or eased.
Credit rating agency Fitch has spruiked gold (and lead) as the only 2 commodities in which it holds a neutral to positive outlook for 2023, and the firm revised up its gold price forecast for the year from $US1,800 per ounce to $US1,850/oz.
Gold remains above its pre-COVID levels and gained ground late in 2022 as bond yields weakened, the US dollar peaked, the global economy continued to slow, and the protracted war in Ukraine continued to evolve.
Financial services firm Canaccord Genuity has a bullish outlook on gold for 2023. It believes that should equity markets transition into a secular bear market, the defensive aspects of gold should help cushion any potential downside.
It is with this renewed outlook that Perth-based junior exploration company Great Boulder Resources (ASX:GBR) is shaping up for a transitional year in 2023.
Focusing on the Side Well Gold Project, located in the heart of a multi-million-ounce field, and strategically located adjacent to Meekatharra in Western Australia, the ‘high-grade’ project presents significant opportunities for the company this year.
Great Boulder Managing Director Andrew Paterson concurs with the broader economic outlook for gold. To capitalise on this, there are a couple of important developments anticipated in 2023 for the company, both of which will set the scene for the year ahead.
“Gold is set for a strong performance in 2023. Share prices of the miners are already starting to appreciate, but there’s plenty of value in the good gold exploration companies. With the big, high-grade Side Well gold project in the heart of one of WA’s oldest gold fields and true greenfields potential yet to be tested at Wellington, Great Boulder is arguably one of the best small cap stories on the ASX.”
Million-ounce gold potential
The first of these important developments the MD refers to is the estimation of a maiden Mineral Resource Estimate (MRE) for Side Well, including all drilling at the Mulga Bill and Ironbark prospects.
Paterson explains: “This resource will be an important benchmark, arriving about 2 years after Great Boulder started drilling in earnest at Side Well and a year after I first stated my view that Side Well had million-ounce gold potential. Having made that bold statement fairly early, the resource will be a significant indication of how far the company has advanced towards the million-ounce target.
“This resource will be an important benchmark, arriving about 2 years after Great Boulder started drilling in earnest at Side Well”
Looking at the bigger picture at Side Well, an initial mineral resource for Mulga Bill and Ironbark will also allow investors to form a view about the broader potential of the project. Recent discoveries south of Ironbark have highlighted a total strike length of 12km of anomalies along the outcropping eastern side of the project, and any future Mulga Bill or Ironbark-style discoveries in this area could more than double the current gold inventory.”
The MD says that the second step-change in 2023 will be the granting of tenure over the Wellington base metals project in the Earaheedy Basin east of Wiluna. With the tenement applications having originally been lodged in April 2021 this has been a drawn-out process. However, it has also given the company time to establish an excellent relationship with the local Aboriginal people at Wellington and sign a heritage and land access agreement for the project.
Paterson adds: “This should enable the company to hit the ground running as soon as the WA Mining Registrar grants the tenements. Bearing in mind the company identified Wellington during desktop studies while Perth was in Covid lockdowns in 2020 and this area was all open ground, which is one of the reasons the company’s geologists think they have the best patch of ground in the basin outside of the world-class zinc-lead discovery by Rumble Resources.
Both these events are anticipated during Q1 2023, and they will set the stage for a busy year ahead. Plenty of news flow for current and potential investors.”
Ticking all the boxes
That news flow and pipeline of work could see Great Boulder’s valuation rise this year, particularly if the gold price stays in positive territory.
According to Paterson, Great Boulder’s value proposition is founded on more than just the quality of its assets and encouraging pipeline of work.
In essence, the intrinsic value of the company involves what the MD refers to as the 3 Ps – People, Projects, and Price.
“People – read the company’s past announcements and try to form a view of whether they’re a professional group. Do they have a past history of exploration success? Don’t throw money at spivs – they’ll just spend it on long lunches. Go with someone you can trust.
Projects – this can be more difficult to assess, depending how advanced the project is. Important factors include grade (‘grade is king’), size potential and location. A big, low-grade deposit in a far-flung location or risky jurisdiction is unlikely to ever be economic; a high-grade project 10 minutes from Meekatharra for example is starting to tick all the right boxes. If it lives up to the company’s expectations – and it’s exceeded them thus far – it’s likely to be a company maker.
Price (or value) – look at other companies with similar-stage or more advanced projects to form a view on how the market is valuing similar companies. Does the company look undervalued? Probably… most of the good gold exploration stocks are after a tough second half in 2022.”
It appears Great Boulder ticks all 3 of these boxes.
For one, Paterson is a geologist with 25 years’ experience in mining who in 2016 was part of the management team that recapitalised Kingston Resources leading to its eventual acquisition of the 2.8-million-ounce Misima Gold Project in Papua New Guinea.
In terms of projects, the company has received ‘high-grade’ gold assays from Side Well as part of a reverse circulation (RC) drilling program at the Ironbark and Mulga Hill deposits, which returned grades of up to 11.85g/t Au.
Price is determined by a myriad of factors, however with a market capitalisation of about $38 million Great Boulder is on a trajectory to enjoy a re-rating this year on the back of successful drilling.
In December, the RC drilling results had shown significant intercepts including 8m @ 6.51g/t Au from 96m including 4m @ 11.85g/t Au from 96m in 22MBRC094 located at Mulga Bill; 24m @ 1.19g/t Au from 68m including 8m @ 2.76g/t Au from 76m in 22IBRC039 located at Ironbark; as well as 4m @ 1.15g/t Au from surface in 22IBRC043 also at Ironbark.
The results followed work in October where rock chip samples were taken during field reconnaissance at Ironbark South, with 2 samples taken from a cluster of shallow historic workings around 1.5km from the southern tenement boundary. These samples confirmed the presence of ‘high-grade’ gold-bearing structures at Ironbark South, and confirmed gold close to the surface.
Great Boulder’s field team has since started geological mapping of structure and stratigraphy from Ironbark to the southern tenement boundary to improve its understanding of the Polelle Syncline, which will assist in prioritising new areas for further exploration.
Blue-sky potential with new exploration targets
In terms of these new exploration targets, Paterson says there is a lot that has piqued the interest of the company.
“The south-eastern area of the Side Well project is looking really exciting – in fact I’ve been saying the auger geochem announcements last year were some of our most exciting updates for the whole year.
“The south-eastern area of the Side Well project is looking really exciting – in fact I’ve been saying the auger geochem announcements last year were some of our most exciting updates for the whole year”
The reason I’m excited is that (A) we’ve already discovered high-grade, near-surface gold at Ironbark; (B) we now have multiple Ironbark look-alike targets over more than 7km of strike from there to the southern boundary; and (C) these rocks are the stratigraphic equivalent of Westgold’s Paddy’s Flat gold camp, but with 130 years less exploration.
It’s basically virgin exploration terrain and we’ve now discovered gold and pathfinder anomalism all over the place. Looking at it together with the ~5km of anomalism previously identified north of Ironbark and we now have over 12km of prospective strike, which makes the Side Well gold project a whole new gold camp – and it’s only 10 minutes’ drive from Meekatharra.”
The MD says the biggest anomaly area south of Ironbark has the same geochemical pathfinder signature as Mulga Bill, but the geology there is not depleted near surface and there is no alluvial cover. Paterson adds that if the company could find a new Mulga Bill close to surface, “that would be a real game-changer on top of the targets we’ve already identified”.
However, at Wellington, Paterson says the possibilities are endless.
“Wellington is real blue-sky potential. We’ve done no work at all on the ground at this stage, but one zinc-lead intersection like the early discoveries from Rumble could really set that area alight.
Realistically it will take at least 12 months to generate drill targets so it’s going to be a slow burn – the project is 60km wide and it’s located in the geographic centre of WA, so the exploration logistics are challenging. But Great Boulder has the team in place to get results.”
December results one to remember
As the company works to generate these drill targets, it continues to receive encouraging gold results from Side Well.
Additionally, auger data analysis from Ironbark North and South indicates that a ‘large’ hydrothermal gold camp, comparable in size to the Paddy’s Flat gold camp, is present within the project to stretch over 12km of strike.
Paterson adds that the results are expected to be applied into a planned maiden Mineral Resource Estimate (MRE) for the Mulga Bill and Ironbark deposits, which is expected to be delivered during Q1 2023.
“That estimate will be an important step for Great Boulder as it will draw a line under the work we have already done and provide a clear benchmark for the potential of current and untested target areas.”
The MD explains that the results at Mulga Bill from late last year are in line with expectations, while more drilling will be undertaken at Ironbark to test the strike and depth extensions.
“It’s particularly encouraging that the company is now predictably intersecting high-grade structures interpreted from previous rounds of drilling. This has given the geologists a lot of confidence in their understanding of the complex, high-grade vein orientations at Mulga Bill.
“It’s particularly encouraging that the company is now predictably intersecting high-grade structures interpreted from previous rounds of drilling”
The last set of results at Ironbark were less interesting but many of those holes were testing areas immediately east of the Ironbark lodes, so they don’t degrade the company’s bullish expectations there. More drilling is planned at Ironbark to test strike and depth extensions and also look at possible high-grade plunge orientations.
Although Ironbark drilling has been relatively shallow thus far, some of the deeper intersections – for example 12m @ 10.24g/t Au from 120m – suggest great potential for a future underground mine.”
However, the grade closer to surface could likely make it a sure thing for open pit mining.
Great Boulder on the move
Meanwhile, the company is not resting on its laurels with Side Well and Great Boulder is on the move.
The company has expanded the total landholding of its Meekatharra footprint in Western Australia through the “opportunistic” acquisition of tenement E51/1995 from Empire Resources (ASX:ERL).
The 100% interest in the 61km-square tenement was bought for $10,000 plus a 1% gross revenue royalty and is considered by Great Boulder to boast potential for gold mineralisation along the Turnberry-St Anne’s trend.
Tenement E51/1995 is located at the southern end of the Gnaweeda belt in WA’s Meekatharra region, about 10km east of Side Well and within proximity to Meeka Metals’ St Anne’s Project to the north.
Paterson says while the tenement is not overly significant in the grand scheme of things, it was “definitely worth a crack”.
“The acquisition only cost $10,000 cash which makes this a low-risk entry into a mineralised greenstone belt, so why not”
“The acquisition only cost $10,000 cash which makes this a low-risk entry into a mineralised greenstone belt, so why not. It is along strike from MEK’s recent Turnberry-St Anne’s discoveries on the same structure, which is good but there have been a couple of companies look over this area before without much success. We’ll see how it goes.”
The MD adds the tenement sits over the southern end of the Gnaweeda Greenstone Belt and straddles the same proterozoic dyke that cuts through Mulga Bill.
“I think Great Boulder has established a solid reputation for smart, effective exploration and calling things as they are. Our informal motto “keep calm, and drill like buggery” has paid off as we’ve continued to deliver a series of extremely high-grade gold intersections from Mulga Bill over the past 12 months.
We’re now in the position where we’re benefitting from an improved understanding of the geological controls at Mulga Bill, enabling us to target high-grade positions more reliably. It’s a complex beast which has taken a while to unlock, and I really appreciate our shareholders’ patience while we’ve been working towards this understanding. During 2023 we’ll be looking to keep growing Mulga Bill and Ironbark, and looking for repeats of both styles of mineralisation on these new targets to the south. We’ll also have first boots on ground at Wellington, which is another exciting project with massive potential.
This is going to be a great year for GBR!”
Write to Adam Orlando at Mining.com.au
Images: Great Boulder Resources Ltd
