Greenstone Resources extends scope of gold deposits at Burbanks

Greenstone Resources (ASX:GSR) expanded the scope of the gold system underpinning its Burbanks Gold Project by 25% on Monday, after posting fresh drill results. 

Phase-1 drilling at Burbanks remains underway with the company reporting multiple high-grade gold intercepts. Though those results published so far have been brief. 

In Australian mining projects, high-grade gold has concentrations of more than five grams of gold per tonne of ore (5g/t), as classified by Investor information provider Undervalued Equity. 

Compare that to the following from Burbanks: 

• 1.32m @ 6.68g/t gold from 210m depth, including 

  • 0.32m @ 20.40g/t gold from 210m 

Previous results highlighted on Monday included: 

• 03m @ 7.28g/t gold from 131m depth, including: 

  • 01m @ 19.2g/t gold from 132m depth 

“Following [another] recent intercept of 7.00 metres @ 57.84g/t Au from 90m in December…we have grown the known mineralised strike horizon by a further 25%,” Greenstone CEO Chris Hansen said. 

Considerations 

While grades above 5g/t are impressive, it’s worth noting one thing about the latest results published Monday and those former results highlighted by the company. Namely: intercept size. 

Greenstone is reporting drill core (or equivalent) samples of under 10m length, which isn’t particularly unusual for first-stage drilling. However, the brief intersections on their own are not enough to form a meaningful Mineral Resource Estimate (MRE) and so should be treated with caution. 

The drills will turn back on at Burbanks later this week. 

Existing JORC-compliant resource 

The company already boasts an existing MRE at Burbanks for 277Koz of gold from 3.4 million tonnes of ore at grades of 2.5g/t. 

That resource pertains to an existing open-pit mine at Burbanks, and most of it is based on gold hit above 200m depth. 

The company has had success with the drills testing for gold below this threshold, which remains absent from the current MRE. Once drilling wraps up by late March, the company will begin working on a resource update. 

What does that achieve? 

This will mean little for the speed at which the company moves to gold sales (or a sale of the mine,) but enhances the bankability of the project, allowing the company greater access to financing. 

In September last year, Management flagged its intentions to scale up exploration at Burbanks through 2023.

IPO spin-off in background 

“Outside of Burbanks, we continue to work closely with our Joint Venture partner at Mt Thirsty in relation to an ownership consolidation and Initial Public Offering (IPO) of the Mt Thirsty project, principally aimed at providing our shareholders with a clear distinction between our base metal and precious metal projects,” Hansen added. 

A look at Greenstone's six month charts shows a step drop in October 2022. Is the market being too harsh to Greenstone?