Nov 14 2013
Gold Bullion Development Corp. (the "Company" or "Gold Bullion") is providing an update on activities at the Granada Gold Property in Quebec with the Pre-Feasibility Study or ("PFS") anticipated in Q4 2013. Since delivery of a cash flow positive PEA last year (February 4, 2013 effective December 21, 2012), the Company has been working to further refine the overall economic strength of the various mining scenarios with the goal of improving margins given the volatility in the gold price during 2013.
Based on the work completed to date, management believes that the upcoming PFS could demonstrate a viable scenario that targets higher grades above 2 grams per tonne. The Granada Mine property mineralization gives Gold Bullion the flexibility to develop the mine at different grades based on market conditions to ensure economic viability.
At this stage in the development of the Granada Mine property, the economic fundamentals appear to be stronger in the upcoming PFS than in the PEA forecast, which had incorporated a larger pit and higher CAPEX scenario. The Company now has several designs for both open pit mining near surface and for underground gold extraction with management currently leaning towards a higher grade production scenario as a risk reduction best practices strategy. In anticipation of a positive PFS, management will focus on the construction of a smaller open pit that is a higher-grade operation for the interim development of the Granada property.
With further drilling it is expected that the gold resource at the Granada Mine property may increase which would then lead to the construction of a larger processing plant. With the present resource of 1.6 million ounces gold at 1 gram per tonne in the M & I categories and 1 million ounces in the inferred category (PEA released February 4, 2013 effective December 21, 2012), detailed as in situ measured resource is 946,000 ounces (28.735 million tonnes grading 1.02 g/t), indicated resource is 659,000 ounces (18.740 million tonnes grading 1.09 g/t), inferred resource is 1,033,000 ounces gold (29.975 million tonnes grading 1.07 g/t Au) using a cut-off grade of 0.40 g/t., the Company is targeting an additional 1 to 2 million ounces grading 3 to 4 grams per tonne within 10 to 15 million tonnes to this total (as press released November 26, 2012) with subsequent drill programmes. As only 20 percent of the extended LONG Bars zone has been explored to date, the potential exists to further increase the resource with future drilling. Currently, the deposit is open to the east, west, north, and at depth. Management has identified a minimum of three additional target areas that remain to be explored on the Granada Mine property.
In terms of processing, the Company is assessing options including mills in close proximity that can provide the customisation milling required for Granada mineralized material. This should aid in limiting risk and moderating costs should this option come to fruition.
A second option, previously referred to as the rolling start production scenario, would require the purchase of a modular mill for use onsite. The advantages for the rolling start include loan payback over a shorter term, cost containment, stability in operations plus the flexibility of being able to move the mill for future use at the Castle Silver Mine properties in Ontario as it would work well for treating high grade silver ores. The mill would process 500 tonnes per day and, given the results from the successful trenching programme conducted last summer, it is now known where to locate the mill for best possible efficiency.
Compared to the first strategic milling process announced in a press release on July 9, 2013, the optimal configuration then, to produce a gold bar, involved gravity, flotation then cyanidation of the flotation concentrates. Additional testing has shown mill recovery in the 97.5% range is better achieved using gravity followed directly by cyanidation of gravity tails.
The on-going study now plans to have a single tailing facility, which assures its long-term stability and a good environmental quality for Granada and its neighbours both now and for future generations. The environmental strategy mitigates any possible long-term liabilities. Adding limestone into the pump box prior to discharge is foreseen as part of achieving these long-term environmental goals.
Revised Pit Layout
The satellite image below shows the revised open pit mine design with the smaller proposed pit layout in red located within the larger pit marked "Pit Used in PEA". One significant advantage of keeping the tonnes per day production at 500 is that mine output will be under the threshold number that necessitates a full-scale environmental impact study under existing regulations thus expediting the production scenario saving both time and money.
The area to the immediate northwest of the larger pit outline is the location of the orphaned tailings from the historical (1935) past producer. Although the Company is currently restricted from drilling there, it is negotiating with the government on how to best deal with the tailings. It is possible the Company will be able to add ounces at depth in that area, in due course.
The overburden storage area is located to the north of the pit and west of the waste pile design image. The pad for the modular mill is located to the west of the pit and north of the tailings containment area.
Waste Pile Design Image
Gold Bullion is planning to leave a permanent legacy landmark constructed from barren rock at the Granada Gold mine. The current design is superimposed in the satellite image above and is an original artwork creation.
Having completed a LIDAR survey in conjunction with the trenching and outcrop mapping programme last summer, the Company has concluded the process of defining the overburden map with little overburden apparent. For optimal pit design, a nominal amount of drilling will be required to enhance the geotechnical data with respect to the hanging wall but by increasing the slope of the North wall, a reduction in the stripping ratio should also reduce mining-related costs.
The Company plans to hold community-based meetings in the near future to outline the details of the proposed plans for gold extraction at the Granada site. The Company plans to select one of the scenarios discussed above once appropriate financing has been secured.
Claude Duplessis, P. Eng., a consultant for SGS Geostat, is acting as the qualified person (QP) for Gold Bullion Development Corp. in compliance with National Instrument 43-101 and has reviewed the technical contents of this press release.
About Gold Bullion Development Corp.
Gold Bullion Development Corp. is a TSX Venture-listed junior natural resource company focusing on the exploration and development of its Granada Property near Rouyn-Noranda, Québec, and its high grade Castle Silver Mine in Gowganda, Ontario. Additional information on the Company's Granada gold property is available by visiting the website at www.GoldBullionDevelopmentCorp.com and on SEDAR.com.
Frank J. Basa, P.Eng.
President and Chief Executive Officer