Gold Bullion Development Alert: Discovery Potential Increases At Granada

We’ve all seen what the prolific “Cadillac Trend” can produce: multi-million ounce gold deposits, and company shares that jump 20, 50 or 100-fold. For Osisko (OSK, TSX) it started nearly five years ago when they reported their first hole of 93.9 metres grading 1.01 g/t at the now massive Canadian Malartic Deposit.

Just 65 kilometres to the west of Osisko’s giant deposit, along the same Cadillac Trend in the world-renowned Abitibi Greenstone Belt, is another former producing mine that could very well turn out to be the region’s next major discovery – the Granada Gold Property being explored by Gold Bullion Development Corporation (GBB, TSX-V). As the saying goes, sometimes the best place to find a new mine is near an old mine. That was Osisko’s line of thinking which paid off so incredibly with Malartic, and it’s also Gold Bullion’s approach with Granada under the watchful eye of President and CEO Frank Basa.

Trading in Gold Bullion was halted yesterday morning and for good reason as the company released its most significant news yet from Granada. In this morning’s Special Alert we’re going to unpackage that important news release and show you why Gold Bullion has the very real potential of sitting on something that’s actually quite rare along the Cadillac Trend – a substantial bulk tonnage gold deposit at Malartic-style shallow depths.

At BullMarketRun.com, our specialty is identifying ground floor opportunities in the junior resource sector that offer major upside potential – that 10 cent or less “diamond in the rough” stock that could take the market by surprise and explode 10-fold or better, creating fortunes for those who saw the opportunity, took a calculated risk and jumped in.

We first brought Gold Bullion to the attention of investors last December when the stock was hovering around 7 cents. It closed yesterday at 10.5 cents, up half a penny, with heavy trading of just over 600,000 shares – all in the final hour after news was released and the stock resumed trading.

Gold Bullion, which is drilling Granada for the first time after historical drilling of nearly 500 holes over a tight area by previous operators, released assays on three holes yesterday including GR-09-15.

Hole 15 intersected 74 metres of 0.88 g/t between 73 and 147 metres depth (an 8-metre section included 6.34 g/t). What is significant about Hole 15, besides its fairly shallow depth, is the fact it was a 600 metre step-out to the east from holes 09-01, 09-02 and 09-03 (assays from those first three holes were released January 26) in an area that according to our analysis, from publicly available maps, has never been drilled before at Granada. The hole delivered a mineable grade over a good intersection. Just to the west of Hole 15, GR-09-05 assayed 31 metres of 0.92 g/t from 92 to 123 metres.

With assays on six of 25 holes now in, Gold Bullion provided us yesterday with the first solid indication of how Granada is beginning to take shape as a potential economic, open pit, low grade bulk tonnage deposit in these very early days:

“Mineralization at the Granada Property remains open in all directions and is now measured at 600 metres in length, 150 metres in width and up to 70 metres in thickness.”

The above measurements are impressive at this early stage and we can’t wait to see how this is looking after all the remaining holes (19 in total from drilling in December and January) are in – and after an additional 20, 30 or 40 thousand metres of drilling are completed which we suspect the company will be aiming to do this year.

Here are some additional important points to consider in evaluating the potential of the Granada deposit:

• Only a small portion (approximately 5%) of the Granada land package (2 km x 7 km) has been explored so far by Gold Bullion;
• The company has already conducted a large bulk sample (140,000 tonnes of which 30,000 tonnes was milled onsite) which produced an average gold grade of 1.62 g/t. How many junior resource companies have done a bulk sample of that magnitude?;
• A 90% recovery rate was realized from that bulk sample;
• The waste from that bulk sample, along with stockpile waste from previous Granada operators, graded 1.75 g/t (Granada’s waste is running at a higher grade than Osisko’s resource);
• The Granada property has grown from two vein structures to multiple vein structures;
• In this type of deposit, gold is not just confined to the quartz-carbonate vein network but is also present in significant amounts within the iron-rich sulphized wall rock (the material between the veins). This has been demonstrated by Gold Bullion’s bulk sample and assay results released the past two weeks which show that mineralization is carrying through the length of each hole. This has significant tonnage implications;
• Historical data for the Granada Mine indicates that whatever was drilled and assayed was 35% higher in grade when it was mined and milled;
• Low cost operation with excellent surrounding infrastructure, just six kilometers south of Rouyn-Noranda.

“It’s like the golden highway, it’s amazing,” Gold Bullion President and CEO Frank Basa told us in a recent interview when we asked him about the ‘Cadillac Trend’. “If you’re organized, if you have a good exploration team, you’ll hit it and you’ll develop good resources. That’s what Osisko did. They took an expired, exhausted mine and took a fresh approach to it. We know that deposit very well. People at Osisko did a phenomenal job tying up a ‘worthless’ property with huge environmental liabilities. I feel even the ounces they’re reported are a little low. Once they get into production they’ll have more gold. It’s the nature of the Cadillac Trend.”

At 10.5 cents, Gold Bullion’s current market capitalization is only $8.5 million (for comparison purposes, the company’s northern neighbor, Yorbeau Resources (YRB.A, TSX), has also been getting encouraging results from its Rouyn Property – a major 2010 drilling program has commenced there – and is now commanding a $37 million market cap, a three-fold increase over where it was just last August).

At its current stock price, and with promising drill results so far, the risk-reward ratio with Gold Bullion Development Corporation is unquestionably attractive.