GBG is looking to develop an iron ore mine in Australia with a minimum 20 year life span. It has a huge iron ore resource, based upon drilling by Western Mining in the 1960s and early 1970s.
As part of that preliminary study WMC drilled a number of percussion holes and 3 deep diamond holes up to 300m apart and conducted preliminary test work on the collected samples. WMC used a figure of 180 million tonnes of magnetite at 35% iron for the Mt Karara study.
Aerial magnetic images and site reconnaissance of Mt Karara indicated that the iron bearing formation extends for over 4km. The grades, (35% iron) and widths (in excess of 100m) are excellent. In addition there appears to be substantial upside with exploration based on the WMC files. Comments by WMC in the open file data that Mt Karara was suitable for beneficiation are also very positive.
GBG has reported that there are discussions with a number of groups including companies who may be interested in getting involved combined with offtake agreements. Note also the recent new Asian major shareholder.
GBG has had a history of sharp upward share price movements since listing about 10 years ago. These were associated with short mine life gold deposits which were successfully developed and mined.
This time GBG is looking at something big, with a long term life span. Based on its past history of successful development GBG has a good chance of success. I suspect GBG has many hundreds of per cent upside in the price and when it gets going this time will not fall back to seven or eight cents.
GBG Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
