Great Basin Gold (TSX: GBG; AMEX: GBN; JSE: GBG) has received yet more good news from its Hollister project with the announcement of a 15% increase in its overall mineral resources. Exploration and infill drilling, adding an appoximate 30,000 feet on top of the 55,000 feet completed for the Feasibility Study, has unearthed new estimates that takes the Hollister project's estimated mineral resources in the measured and indicated category to 1.6 million gold equivalent ounces. Overall the mineral resources increased by 15% from 2 million to 2.3 million ounces including inferred material.
At a 0.25 oz/ton cut-off, estimated measured and indicated resources are 1,615,000 tons at a grade of 0.87 oz/ton. A further 680,000 gold equivalent ounces are contained in inferred resources of 1,252,000 tons at a grade of 0.51 oz/ton.
The exploration program at Hollister isn't quite finished yet either, the short-term focus was to convert the company's previous inferred resources to measured and indicated categories - a target Great Basin has managed to meet with a large degree of success so far. Longer term the exploration will, hopefully, aim to explore the deposit along strike and at depth to provide the gold developer with something extra to celebrate.
With this kind of progress Great Basin's CEO Ferdi Dippenaar could be forgiven for feeling the exploration program is already worth the $14 million invested by Great Basin, even if only a portion of the assays are available in these early days. The exploration has barely begun at Hollister but these preliminary findings have given him room for high hopes, leading him to comment that ‘With the increased size of the measured and indicated resource, the life-of-mine plan for Hollister could change, possibly extending the life of the operation considerably.'
It has been a good time for GBG of late - only recently the company announced that the Hollister project's energy use would be low enough to evade any dramatic impact from the inflationary environment and possibly even allow Hollister's margin to rise off the gold price despite the increase in costs.
After comments made by Dippenaar, and the current ongoing exploration program, it seems unlikely that Great Basin will sell its high-grade project, despite speculation earlier in this year, although a reasonable bid by one of the gold majors such as Newmont or Barrick may prove too irresistible to miss for the gold junior as its CEO may be looking towards a platinum horizon as he looks for opportunities for Great Basin to diversify into.