Vancouver, BC / March 4, 2014 / Until the beginning of 2013, the East and West Seel (Seel) areas of Gold Reach's (GRV: TSX-V) advanced stage exploration project, the Ootsa Property south of Smithers BC, were the focus. The Company's 2013 drill program saw the Ox property, 4km from eastern portion of the Seel, come into its own as well as a significant expansion of the Seel.
Like the Seel, Ox has an at surface high-grade area, which helps with payback economics for any long-term plans.
Over the last three years, following Dr. Shane Ebert's installation as President, the company has seen its M&I resource rise 227% over 2013 estimates. Constrained resource comes in at 124 million tonnes of M&I and 223.6 million tonnes of inferred at a 0.2% copper equivalent cutoff. At the same grade cutoff, the contained metals total 1.25 billion pounds copper equivalent M&I and 1.66 billion in the inferred category.
For context, the adjacent Huckleberry Mine, co-owned by Imperial Metals [III - TSX] and a Japanese conglomerate that includes Mitsubishi, currently processes 17,000t per day, and employs 380 people. However, the days for the Mine appear to be numbered. With a mineral reserve of 49.9 million tonnes grading 0.334% Cu, and all necessary infrastructure in place, the operation is expected to run out in 2021, according to Imperial Metals.
So one could infer that the long-term future of Huckleberry will either have to include Gold Reach's 67,000 hectares on the Ootsa property, or else, the consortium behind Huckleberry are going to need a new resource discovery on their current property. At this stage, the Ootsa expansion seems more likely.
GRV's 2013 drill program resulted in 37.62 million tonnes at Ox being advanced to the measured and indicated categories, as well as Seel's 48.58 million tonnes, providing a very large increase in confidence in the deposits. The West Seel deposit remains open for expansion near the surface and at depth.
To date Gold Reach has drilled 143,878 metres on the Ootsa, with 36,135 metres drilled in 147 holes in 2013, which resulted the aforementioned rise in M&I and inferred resources. So far, results have been extremely significant, including multiple eye-popping intercepts. A small sample of these included:
From 2012 Program
- Hole S12-101, with 521.8 metres grading 0.57% copper equivalent - Hole S12-118, with 537.0 metres grading 0.65% copper equivalent (incl. 194m of 1.01% copper equivalent)
From 2013 Program
- Hole S13-183, with 179.5 metres grading 0.80% copper equivalent (incl. 24m of 2.01% copper equivalent) - Hole S13-148, with 146.3 metres grading 0.94% copper equivalent (incl. 44m of 1.76% copper equivalent)
Ootsa Property Open Pit contained metals at 0.2% Cu Eq. cut off
While these two deposits are being given the bulk of the company's focus, the Ootsa property is large enough to contain multiple other deposits in the future. Given the outline of the trends from both Gold Reach's deposits, and that being exploited at Huckleberry, there are favourable indications in place that hint towards all of these areas being part of a much larger system.
One of the outside areas of interest is Gold Reach's Damascus silver/gold vein system, which is a fault running north-south located to the southeast of Seel, but also within Ootsa's borders. Damascus is a dark horse on the project, but gives a lot of blue-sky when looking at it under the lens of a later stage mineralization in a copper porphyry environment with gold and silver potential.
The 2013 soil-sampling program has discovered a large lead in soil anomaly located east of the Damascus silver-lead-zinc vein. This anomaly measures 530 metres by 150 metres in size and correlates with a strong north south linear, interpreted to be a fault that is parallel to the fault controlling the adjacent Damascus vein. This zone has been termed the East Damascus Target, and the structural setting and large lead in soil anomaly make it a very good target for base metal silver vein mineralization, similar to that at Damascus. The lead in soil anomaly at the East Damascus Target is much larger and much stronger than the anomaly over the Damascus vein.
The Bottom Line
Gold Reach's progress over the past year has been more than impressive and a testament to Dr. Ebert and his team. During 2013, while expanding the Seel property through an aggressive drilling program, bringing the Ox property on stream lit up the M&I as well as inferred resources.
Strategic drilling and judicious use of resources have delivered numbers that add significant shareholder value in what is a very tough market, both for E&P companies and their shareholders. I suspect 2014 will be no different, with further expansion of the Seel and Ox and delineation of the Damascus targets.
Coupled with quality and impressive results of the property is of course the spectre of the copper supply/demand situation, which should play out in higher prices over the next year or two. Infrastructure is in place, the potential of either some relationship with the Huckleberry or possibly a JV partner connotes that this will be an active and growing resource and likely to continue delivering value for shareholders.
The shares popped from $0.80 in December to $1.20 in early January, settling around $0.90 currently. Market cap is an approximately $32 million.
For eastern readers of the BLR, the Company will be attending the Prospectors and Developers Association of Canada (PDAC) 2014 convention at the Metro Toronto Convention Centre, Toronto. The Company will have a display at booth 2525 in the Exhibitor Hall, level 800, from March 2 to March 5, 2014.
I'm sure they'd love to see you if you get the chance to drop by.
Bob Beaty for The Bottom Line Report.
Gold Reach Resources Ltd.PO Box 10351888 - 700 West Georgia StreetVancouver, BC V7Y 1G5Phone: 604-718-5454Fax: 604-646-2054Toll Free: 1-888-500-4587
Legal Disclaimer/Disclosure: A fee has been paid for the production and distribution of this Report. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. No information in this Report should be construed as individualized investment advice. A licensed financial advisor should be consulted prior to making any investment decision. The Bottom Line Report makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of the Bottom Line Report only and are subject to change without notice. The Bottom Line Report assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.