Great Bear Resources (Vancouver: GBR) (OTC: GTBAF) — and its shareholders — benefited from the combination of an analyst site visit and a great news release in quick succession, notes Brien Lundin, mining sector specialist and editor of Gold Newsletter.
The news release covered both deep drilling along 1.4 kilometers of the LP Fault in search of high-grade gold at depths well below the previous drilling, as well as additional lower-grade, shallow resource definition drilling along 2.6 kilometers of the fault.
Both programs within the program were successful, with the deep, high-grade drilling highlighted by Hole 385 (157.00 g/t gold over 1.20 meters, within 11.01 g/t gold over 22.85 meters).
Confirming that the numerous high-grade domains on the 4.2-kilometer-long LP Fault extend to depth, and far deeper than the initial resource will be calculated, is vital to maintaining the kind of upside potential to the resource that will attract a major buyer. These latest results do precisely that.
Importantly, the company also provided news on their upcoming news flow and the on-going Phase ll drill program. The company is expecting to deliver the pivotal maiden resource in the first quarter of next year, to be followed by a PEA.
Then will come an LP Fault resource update including the deeper drilling being done now, as well as a maiden resource for the Dixie Limb and Hinge zones, which will also be targeted in the Phase II drilling. The company notes that the Phase II drilling is being done “with the goal of significantly expanding the drill confirmed extent of gold mineralization at the LP Fault by late 2022.”
In response to all of the above, the share price recently gained about C$2.50, or nearly 20%. My expectation is that Great Bear will be taken out by a buyer somewhere in the C$30-C$40 price range over the next two years. The first big catalyst toward proving that kind of value will be the initial resource estimate early next year.
It’s going to be a big number, and there’s little doubt of that. The important task ahead for Great Bear’s management team will be managing expectations ahead of that number while also highlighting the significant added resource potential beyond it.
I think they’re very capable of doing that and seem on the right track. Thus, Great Bear remains a buy, even after the recent gains.