Thursday, April 02, 2009
Bonanza gold and silver grades bode well for Bravo Venture Group by Jackie Steinitz
Read any general analysts’ report on stock picking in the gold exploration sector in the current economic climate and certain key themes emerge: the importance of cash and a good management team who have “been there, done that”, the current market preference for projects with low political risk, and the need for robust project economics, which are helped enormously, of course, by high grades.
A company which scores very favourably on these criteria is the TSX-listed Bravo Venture Group which is currently exploring for gold, silver and base metals on the west side of North America with projects in British Columbia, Alaska and Nevada.
Current Portfolio in BC, Alaska and Nevada
Bravo’s flagship project is the 27.25 square kilometre Homestake Ridge, BC which is located 35km south east of Stewart near the BC/Alaskan border, and 32km (of which 26km is by road) to the nearest tidewater. Geologically it lies on the highly prolific Iskut-Stewart-Kitsault belt and hosts Jurassic age Hazelton Group rocks which are of similar age and structure to the Eskay Creek mine which is 115km away and considered one of richest and best discoveries in BC over the last 20 years with cumulative production of 3.3Moz of gold (at 45.6g/t) and 160Moz of silver (at 2,231g/t) and life of mine cash costs below US$60 per ounce of gold (after allowing for silver credits).
Homestake Ridge has been explored intermittently since 1914 by a number of majors including Newmont and Teck Cominco. Bravo’s involvement began in 2003 when it signed option agreements with Teck and a private Optionor for two blocks of mineral claims. By December 2007 it had completed its 100% earn-in, having fulfilled all the conditions of the agreements. Teck declined its option to a back-in but will still receive a 2% NSR (Net Smelter Return) royalty, though Bravo have the right to purchase 1% of the royalty for $1m. Similar conditions apply for the private Optionor block.
In early 2007 after the completion of 45 drill holes Bravo published a NI 43-101 report which yielded 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%). The report concluded that a significant mineral resource had been partially explored and that the geometry of the zone could be favourable to open pit mining, although other factors such as glacial ice or snow fall may lead to other methods being chosen. It noted that the deposit was open at depth and along strike to the south east and in the north west, which hosted the higher grade sections. Further work was warranted to expand and improve the estimate at the main zone, to investigate possible bonanza grade feeder faults beneath the known stratabound mineralisation and to expand the targets at two other zones; the Homestake Silver Zone (400 metres south east of the Main zone) and the Vanguard Gold zone (2,200 metres south east).
Work was duly begun in the 2007 season when 28 holes were drilled. Results from the 42 drill hole, 8,700 metre programme in 2008 were stellar with one of the best holes, (Hole 87), yielding 73 metres at 21g/t gold of which 7.7 metres were at an astonishing 181.6g/tonne. The assays also indicated the existence of a silver cap, with some holes returning silver grades which can be measured in kilos per tonne. The very best silver hole (Hole 99), for example, included over a metre at 6kg/tonne and 9 metres at 1kg+/tonne.
Drill Results from Holes 87 and 99 (150 metres apart) http://www.proactiveinvestors.co.uk/genera/files/.../Image/Bravo1.jpg
Bravo’s response to these results has been to abandon its original plan to publish an updated NI-43-101 early in 2009 and then look for JV with a deep-pocketed miner. Instead the company decided that it is in the shareholder’s interests to go it alone in 2009 and to evaluate the significance, continuity and extent of the bonanza holes. It has decided therefore to conduct a further 8000m drilling to focus on the possible extension of the high grade gold zone and to test the gap between the Main Zone and the Homestake Silver Zone. It will publish an updated resource estimate only after the completion of the 2009 exploration season and then it will probably begin to look for a mining partner; Bravo sees itself primarily as an exploration company.
Less than 200km north west from Homestake is Bravo’s Woewodski Island Project in Alaska. The property, which lies some 30km south west of the inland passage town of Petersburg, covers 32 square kilometres. Drilling began in 2008 and 7 holes were drilled for a total of 745 metres. No potential ore grades were intersected but the data collected, which included intervals of black argillite, has enabled Bravo to reinterpret the geology and to investigate similarities with Hecla’s Greens Creek polymetallic mine, the world’s fifth largest silver mine with associated zinc, gold and lead located some 145km to the North. Plans for 2009 include drilling a further three to five holes.
Meanwhile in Nevada Bravo holds a substantial land package consisting of thirteen projects (one in a JV with Barrick) with a total area of 98 square kilometres located in the Battle Mountain/Eureka trend where 32M ounces of gold have been discovered in the last 18 years including the Pipeline Deposit (23Moz) and Cortez Hills (8.5Moz). This is the second most productive belt in Nevada after the Carlin trend which runs parallel to Battle Mountain/Eureka. Bravo is targeting a Carlin-type deposit and to date has advanced a number of the projects to the drill-ready stage. The company’s strategy in Nevada is to use “other people’s money” for drilling and it actively is pursuing joint-venture opportunities.
The Management Team and the Manex Umbrella
Bravo is one of six companies under the Manex Resources Group umbrella. Manex is a private corporation which provides a number of central financial, legal, administrative and geological services to the group providing each company with expertise and enabling them to achieve economies of scale and thus increase the proportion of expenditure that is spent in the ground. Since its formation in 1997 companies under the Manex umbrella have raised C$250m to fund exploration.
Many directors of Manex companies have worked together in the past on other projects notching up a number of successes both individually and collectively. For example, Manex was an early sponsor of Western Silver Corp. which developed the world class Penasquito project in Mexico - now the flagship of Goldcorp.
The fact that Bravo have recently succeeded in raising C$2M in private placements despite the current market conditions is testament to the market view of Bravo’s team and projects. However the share price took a hit following announcement about postponement of updated resource estimate.
Looking ahead even if the geology proves as favourable as hoped there will still be a number of permitting and infrastructural hoops to jump through before Homestake can become a mine. The terrain is steep, the exploration season is short (roughly from June to October), the road currently finishes several kilometres from the site, and there is not yet power, though a private power company is currently developing two green power sites and a hydro electric scheme which could supply the property. But Bravo has been thinking ahead and has strong relationships both at the federal and provincial levels with government bodies and environmental regulators and locally it has maintained strong relationships with the First Nations communities and municipalities
With road access to tidewater and power infrastructure relatively near-to-hand, the project economics could potentially be very robust in the light of the outstanding drilling results. Bravo appears to have made a top-notch discovery and might be announcing a significant resource upgrade later in the year. It has C$1.5 million cash in the treasury and commitments for future funding sufficient for this year’s exploration plans, the management team already has a number of successes under its belt and the political risk of all its projects is low.
Quelle: http://www.proactiveinvestors.com/companies/news/1227/bonanz…
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