Bravo Gold is now totally focussed on what director Robert Swenarchuk describes as the "ultimate transaction". Its programme for 2010, which includes publication of an updated 43-101 resource, an aggressive 10,000 -15,000 metre drill programme, further metallurgical work and preliminary economic and design studies, is all designed to take it closer to that transaction by enhancing the saleability and attractiveness of Homestake Ridge. To date 11 potential suitors – both majors and mid-tier miners – have visited the project and signed confidentiality agreements.
Background to Bravo and the Homestake Ridge Project
Bravo's background was covered in some detail in a Proactive Investors article written last March. In brief, the company is one of eight in the Vancouver-based Manex Resources Group, which provides central financial, legal, admin and geological services to the group. Bravo's involvement in the Homestake Ridge property began in 2003 when it signed option agreements with Teck Cominco and a private Optionor. It has since fulfilled full earn-in requirements and acquired other claims on the project so the company now has 100% ownership of the 27.6 square kilometres project, although there are a number of royalty obligations to be met, including a 2% NSR royalty (see the most recent MDA for full details).
Homestake Ridge lies close to the BC/Alaska border some 35km south of Stewart, 32km from the nearest tidewater and 6km from existing access along a gravel road. It is 115km from Eskay Creek, which was mined by Barrick from 1995-2008 and, thanks to its remarkable grades (which averaged over 48g/tonne gold, 2000g/t silver, 4% zinc and 0.5% copper), was the fifth largest silver mine in the world despite a relatively small (2.6 million) tonnage.
Like the geologically-similar Eskay Creek, Homestake Ridge is a VMS/epithermal gold vein property. The Main Homestake deposit was the first to be discovered on the property and in 2007, after a 45-hole drill programme, Bravo published its maiden N43-101 resource, an inferred estimate of 11.9M tonnes containing 903,000 ounces of gold (at a grade of 2.36g/t), 5.75M ounces of silver (graded 15g/t) and 27.6Mlbs of copper (at 0.11%).
Since then Bravo have drilled a further 57 holes at the Main Homestake deposit and have drilled 27 holes at the newly discovered Homestake Silver deposit some 700 metres to the southeast.
The recent drilling programme on the Main Homestake deposit was a mix of in-fill and step-out drilling designed to test the extent and geometry of the mineralization and to improve the confidence of the maiden estimate. Highlights have included:
• Hole HR08‐87 which returned a 52 metre intercept averaging 21.0 g/t Au including a 7.7 metre bonanza intercept averaging 181.6 g/t Au.
• Hole HR09-152 which returned an 11.9 metre interval at 13.0g/tonne gold and 19.5g/t silver within a 42 metre interval grading 6.1g/t gold and 11.3g/t silver.
Meanwhile the drilling programme at Homestake Silver was designed to produce the first resource estimate for the deposit. Results have been spectacular, particularly in the more recent holes, and have demonstrated that the deposit has a silver-rich top with a deeper gold-rich core in multiple veins (see the long section diagram below where the red circles denote individual high grade gold assays of +15g/t). Highlights have included:
• Hole HR09-146 which returned a 0.7 metre interval averaging 49.0g/t gold and 9027g/t silver within a 3.6 metre interval of higher grade averaging 10.6g/t gold and 1689.6g/t silver, which in turn is part of an overall 22.6 metre interval averaging 2.1g/t gold and 294.3g/t silver.
• Hole HR09-161 with an intercept of 51.9g/t gold and 2592g/t silver, 2.8% lead and 3.0% zinc over 1.9 metres within a 7 metre interval averaging 18.2g/t gold and 946g/t silver.
• Hole HR09-164 which intersected 1.2 metres of 12.7g/t gold, 96.1g/t silver, 7.3% lead and 7% zinc within a 10 metre intercept of 4.4g/t gold and 31.6g/t silver.
• Hole HR09-165 which included multiple high-grade gold intercepts of significant thickness, including 24.4 metres at 12.1g/t gold and 6.8g/t silver, 14.5 metres at 4.8g/t gold and 2.1 g/t silver and 2.7 metres at 10.0g/t gold and 134.3g/t silver.
Results from the drilling programme on both deposits are being analysed by the consultancy firm, Scott Wilson Mining, who will develop a new 43-101 resource estimate for each deposit, hopefully by the third quarter of this year. Results from metallurgical studies on the core from the Main Homestake deposit have already been published, indicating high recoveries of 87% to 92% for gold, and 59% to 70% for silver.
Long Section of Main Homestake and Homestake Silver Deposits
In addition to the drilling programme, the unusually hot and dry weather last summer enabled Bravo to commission further analysis on the property from a 630 line-km AeroTEM III airborne geophysical survey. The survey included a radiometric survey, which measures thorium, uranium and potassium concentrations, which identified strong potassium enrichment in association with mineralization at both the Main Homestake and Homestake Silver deposits. It also identified a similar but more widespread potassic anomaly to the east of these two deposits. This data, in combination with surface mapping and results from the eighteen holes drilled in other parts of the property, is of great significance as it indicates the project likely hosts other high-grade deposits. It has also enabled Bravo to identify six new targets for follow-up in 2010 along with planned further work on Homestake Silver deposit.
Nevada Projects : Bravada Gold Corporation (40% owned by Bravo Gold)
Although Homestake Ridge has been Bravo's flagship project for several years, the Group has also controlled properties in Nevada since 2003. Last year the Group decided that the time was ripe to spin out these projects into a separate vehicle, Bravada, partly because investors had not been crediting the value of these properties in Bravo's share price, partly as a dividend to shareholders, but principally in order to focus more fully on the potential of Homestake and to enhance its future saleability.
A Plan of Arrangement was therefore announced in September 2009 and approved by shareholders in February 2010 whereby Bravo will credit $1.5m to the new company and retain 40% ownership while the remaining 60% is being distributed to Bravo's shareholders as of 31st December 2009 at a rate of one Bravada share for each ten Bravo shares held.
Bravada, which will operate independently, is in the process of listing on the Toronto Venture Exchange. It currently holds 13 projects in its portfolio, all of which lie on the Battle Mountain-Eureka Gold trend which runs parallel to the world-class Carlin trend. Although the BM-E is less well explored, it is known to contain a number of large gold deposits; +38M ounces have either been produced or are in resources along the trend to date, with several new discoveries being announced each year. Bravada’s bet is that the BM-E will ultimately rival Carlin.
Bravada's currently holds 946 claims with a total area of 84 square kilometres spread from top to bottom along the BM-E trend. It is one of the largest junior landholders in the trend. To date the company has identified drill targets on six of its properties and permitting is either complete or in progress. In February, it acquired the NSR project in the Cortez district form Agnico-Eagle, where surface sampling has confirmed the presence of 1g/t gold with Carlin-style geochemistry. Bravada is also looking at other acquisitions in the area.
Bravo's Future Plans
It has been an exceptional year for Bravo. Drilling results have been excellent, the geophysical survey identified new targets, the Bravada spin-off is now almost complete and the company is well positioned to hit the ground running for the 2010 exploration season (roughly June to October) with plentiful funds in the coffers and a clear exploration programme in place. Specifically the programme will include:
• the publication of a 43-101 complaint resource, hopefully in the third quarter of the year, on the Main Homestake and Homestake Silver deposits
• a 10-15,000 metre aggressive drill programme which aims to expand the emerging high-grade gold potential of the Homestake Silver deposit and to explore the six new targets
• further metallurgical work on the Homestake Silver core
• field studies in preparation of permitting road access into the project
• initial economic and engineering studies necessary to develop a mine at the property.
There is sufficient funding in the Treasury to cover the initial budget plans of a $6.5M programme for 2010 season plus the $1.5M investment in Bravada. However, Bravo's aim is to explore aggressively in order quickly to define the number of ounces and the quality of the ounces that it can bring to the negotiating table. As Jeff Stuart, Director of Corporate Development, told Proactive Investors, if results continue to merit it then Bravo will revisit the market to raise whatever funds are required. He cited the example of Kinross' friendly takeover of Underworld Resources, a TSX-V listed junior which had successfully defined 1.6M ounces at an average grade of over 2.5g/t at the White Gold Project in Yukon. Kinross' offer, accepted in March 2010 valued the company at $139M, a 36% premium to the market capitalisation, even though the exploration was still relatively early stage.
Stuart hopes that with eleven shows of interest already Bravo could be next off the block and that the forthcoming season could be prove to be a company maker. In the meantime there should be plenty of news flow given Bravo's excellent results to date, the quality of the project, the possibility of discovering other deposits and the extensive exploration programme planned.
http://www.proactiveinvestors.co.uk/companies/news/15719/bravo-gold-corps-next-season-could-be-a-company-maker-15719.html
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