Company Overview: Great Boulder Resources Limited is a mineral exploration company, with a primary focus on exploration, discovery and delineation of gold deposits. The Company's Balagundi Project is located approximately 20 kilometers east of the Kalgoorlie Super Pit and the township of Kalgoorlie in the Eastern Goldfields District of Western Australia. Its Broadwood Project is located between the historical Binduli gold mining center and the Golden Mile/Kalgoorlie Super Pit alongside the township of Kalgoorlie. Its Jundee South Project is located east of Wiluna in the Eastern Goldfields district of Western Australia, approximately 10 kilometers along strike from the Jundee Gold Mine operated by Northern Star Resources Limited. Its Tarmoola Project is located over 40 kilometers north-west of Leonora. Its Yamarna project is located approximately 130 kilometers east of Laverton, and over 30 kilometers west of the Gruyere gold deposit in the Eastern Goldfields District of Western Australia.


GBR Details

Great Boulder Resources Ltd (ASX: GBR), is a relatively new Gold exploration company that also focuses on copper-nickel-cobalt projects. GBR is engaged in the Discovery and Commercialization of Gold deposits in Australia's premier Gold district; and has consolidated a high-quality portfolio of five exploration projects (Balagundi, Broadwood, Jundee South, Tarmoola, and Yamarna) in the significant gold camps of the Eastern Goldfields in Western Australia. It further plans to actively explore its Project portfolio. The company is initially focusing on the Balagundi Project, which is at a more advanced stage. Group’s agreement with Ausgold and focus on copper-nickel-cobalt exploration within the Yamarna region, along with maiden drill program that has been completed at the Eastern Mafic with new magmatic sulphide system being identified, are expected to boost the performance of the group. The group has witnessed higher nickel assays at Eastern Mafic and Winchester. GBR has secured independent options from Gold Road Limited (ASX:GOR); and from Ausgold Limited (ASX:AUC) on a joint venture over the Winchester project. The group seems to have a stake from institutional investors and this is indicative of a level of credibility; and also has some insiders with holding in the group. At the end of the September 2018 quarter, Great Boulder had $2.4m in cash but has to work on financial performance which is linked to exploration success.


Financial Performance (Source: Company Reports)

Increased nickel, copper, cobalt and PGE grades at the Eastern Mafic and Winchester projects: Group’s latest assays from Eastern Mafic (still early days) have unearthed further increases in copper, nickel and cobalt grades; and the first significant occurrence of platinum and palladium (PGE, platinum group element). The results have confirmed the Cortina prospect, which is located 600m west of Zermatt and within the ‘neck’ of the intrusion, containing significant copper, nickel and cobalt mineralization. The significant copper, nickel and PGE mineralization has been intersected within the feeder zone, with grades up to 3.1% Cu, 0.6% Ni and 0.64g/t PGE at anomaly ML13 and 0.7% nickel, 0.15g/t PGE and 0.08% cobalt at Ben Lomond. The enhanced PGE grades offer valuable by-product credits and are commonly associated with magmatic nickel sulphide deposits. The first two holes drilled at Winchester, (under option agreement with Ausgold Limited) also shows significant gold and PGE credits. In addition to mineralisation drilled at Winchester, there are several more airborne EM targets, that have been identified by the company. GBR is currently assessing these targets and designing the follow-up drill programs, which will be implemented once the formal joint venture with Ausgold commences. Previously, GBR had already established extensive mineralisation at Mt Venn and the Eastern Mafic. GBR has completed the drilling on Ausgold’s 100% owned Yamarna Project, located 125 km northeast of Laverton in Western Australia, and have identified high grade nickel-copper mineralization. The Yamarna Project is located 40km north along strike of Great Boulder’s Mt Venn Project, has the exploration licences for E38/2129 and ELA 38/3311 covering approximately 300km of the northern Mt Venn Greenstone Belt.

After executing the formal joint venture with Ausgold, the company plans to commence a larger systematic exploration program over the Yamarna Project and to grow & develop assets of Mt Venn and the Eastern Mafic with Ausgold. Meanwhile, Ausgold had initially identified 19 targets at the Yamarna Project, by using both airborne and fixed loop ground electromagnetic (EM) surveying methods.


New Results At Eastern Mafic (Source: Company Reports)

Agreement between Ausgold & GBR: Ausgold & GBR have signed an agreement, under which, Ausgold has granted GBR an option to form a joint venture on E38/2129 and ELA38/3311 for the expenditure of $50,000 on E38/2129 during the current reporting year. Great Boulder under this agreement had to drill two EM targets immediately at the Winchester Prospect, and this obligation has now been satisfied by the company. After the exercise of the option, Great Boulder will have the right to earn a 75% interest in the Yamarna Project by issuing Ausgold 1,500,000 fully paid ordinary shares and spending a minimum $500,000 on exploration on the tenements for a term of four years. After Great Boulder meets the minimum expenditure milestone, Ausgold will retain a 25% free-carried interest in the Project up until a decision to mine. This agreement will allow both the companies to use regional expertise across a single, large belt.


Location of Ausgold’s Yamarna and Great Boulder’s Mt Venn projects (Source: Company Reports)

Developments during the September quarter: During the September quarter, GBR successfully completed the maiden drill program and has identified a new magmatic sulphide system at the Eastern Mafic which reflects a significant improvement in nickel grade and tenor when compared to Mt Venn. The company has drilled a total of 30 RC and drilled diamond holes for 6,777m. The results have come from the majority of drill holes, though the assays were pending for the final eight holes of the program. GBR has identified three distinct sulphide phases at the Eastern Mafic that has high-tenor nickel sulphide along the feeder zone and neck of the intrusion at Zermatt is considered to have the most prospective high-grade nickel sulphide mineralization, which supports Great Boulder’s view that the Eastern Mafic is closer to the source of high grade nickel mineralisation. While, Mt Venn only has a single phase of low-tenor nickel, but the deposit seems to be more copper and cobalt rich as compared to Eastern Mafic.

GBR is focusing its exploration efforts along the 6km feeder zone and neck of the intrusion, and is targeting basal accumulations of the higher tenor nickel sulphide where massive sulphide typically accumulates. Moreover, the drilling at Zermatt has now defined mineralisation over 400m of strike, which is within an upper and lower sulphide lens. Mineralisation is mostly hosted in gabbro (minor ultramafic) with nickel grade and tenor improving towards the southeast and at depth in the lower lens. The Cortina prospect, that is located 500m southwest from Zermatt, reflects similar mineralisation to Zermatt. A more massive but lower nickel tenor lens that produces a strong EM response was intersected in 18EMRC006, and a disseminated but higher tenor lens associated with a mafic-ultramafic contact was intersected in 18EMRC003. Additionally, GBR during the September quarter, has completed 19 RC and diamond holes at Mt Venn for 4,284m. The first metallurgical tests on the samples from the Mt Venn project in WA have resulted in high-value copper, nickel and cobalt products. The primary purpose of the initial test-work was the development of a viable flowsheet that is expected to maximize the value recovery for multiple products containing copper, nickel and cobalt. Copper is shown to primarily report to the flotation concentrate with additional copper reporting to the bulk nickel-copper concentrate that was leached to extract nickel and cobalt as well as any copper which was not captured in copper flotation. The products from the first metallurgical tests comprised of copper sulphide (42% Cu), which will be blended with the copper flotation concentrate, and has improved overall recovery and concentrate grade. The company has also produced high quality chemical grade cobalt sulphate (29% Co, +99% Cobalt sulphate) and this product is suitable for high value use in the battery market. Further, GBR produced a high-quality nickel sulphide (42% Ni) and the testwork to produce nickel sulphate is expected to commence shortly.

Other developments during the September 2018 quarter: During the September quarter,  Great Boulder received an extension of term for the Jundee South tenement (E53/1101) until 27 July 2019. However, the company is yet to undertake exploration activities. The company has also not undertaken any field activities at the Tarmoola project during the September quarter. The company has commenced a 1,000m RC drill program at Tarmoola in October, that covers a 2km long anomalous gold trend. The results of this have been expected around mid-November. Moreover, during the September quarter, Great Boulder has withdrawn from the Balagundi and Broadwood joint ventures in order to focus on copper-nickel-cobalt exploration within the Yamarna region.


Investment Scenario (Source: Company Reports)

Stock Recommendation: GBR stock has fallen 66.30% in three months as on November 15, 2018. The stock has support at $0.11 and resistance at $0.27. GBR is a new company and is yet to formalize the formal joint venture with Ausgold. After this, the company plans to commence a larger systematic exploration program over the Yamarna Project and to grow & develop assets of Mt Venn and the Eastern Mafic. The company has consolidated its position in the Yamarna copper-nickel-cobalt belt. Mt. Venn is the most advanced project of the company as the drilling of 13,700 is completed. Winchester is an advanced project and Mt. Carlon contains mafic ultramafic intrusions, and is also prospective for copper nickel sulphide mineralization. While risks related to development and exploration are borne in mind, the group aims to bring products that can be of high value use in the battery market. Therefore, we give a “Speculative Buy” recommendation on the stock at the current price of $0.155, ahead of CEO sessions scheduled in the forthcoming days.
 

GBR Daily Chart (Source: Thomson Reuters)
 

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