The holiday season is a special time of year. At Gold Bull
Resources Corp. (TSX-V: GBRC) (“
Gold Bull” or the
“
Company”) we use this time as an opportunity to
reflect on the year that was, and, to design a road map aimed at
achieving our goals the following year.
2022 has been a difficult year in the precious
metals markets, in particularly in the junior gold exploration
sector. Post COVID, the price of gold has not behaved as well as
most economists expected it to, and as a result, gold has been
outshone by its battery mineral cousins. Given the difficult market
conditions, during the year, the Company made the difficult
decision to reduce its team to reduce our overheads, while
continuing to advance our core asset, the Sandman Project
(“Sandman”) located in Nevada, USA.
Sandman
During the year, Gold Bull drilled a further 24
holes at Sandman for a total of 4954 meters. These drill results
included results such as 83.8m at 1.5 g/t Au from
the surface at Silica Ridge and included the successful
intersection of a high-grade feeder, in that same hole 3m
at 14.67 g/t Au from only 1.5m below the surface. In a
nearby hole, we hit 47.2m at 1.54g/t Au from 1.5m,
which included a wide high-grade zone of 6.1m at 8.01 g/t
Au from 3m. These extraordinary drill results largely were
ignored in that with each positive drilling update announcement,
came downward pressure on our share price. Given the market’s
negative reaction to our 2022 exploration drill program, the
Company decided to commission a Preliminary Economic Assessment
(“PEA” or “Scoping Study”) to investigate the viability of a
small-scale startup operation (proposed mine) at Sandman, focusing
on the existing gold resources above the water table.
Sandman boasts a gold resource of circa 500,000
ounces, of which about half is located above the ground water
table. We chose to focus our PEA on a small-scale operation
targeting extracting the gold only above the water table (about
250,000 ounces), because that typically equates to faster and
simpler mine permitting, i.e., capable of generating cashflow as
soon as possible. The PEA considered a conventional heap leach
mining operation targeting 35,000 ounces of gold produced per annum
over an initial 5-year operation. Given the nature of the Sandman
deposits (outcropping), a 2.1 Mtpa production rate and very low
strip ratio of 1.6:1 extracts an average gold grade of 0.74 g/t Au
(all oxide). The economics for this scenario is robust, with a
99% IRR (pretax) and NPV of
USD$77.2M, with only a 1.1 year payback
period (pretax). The PEA illustrates a USD$77M NPV, on
only half of our existing gold resource (which remains open in
numerous directions). In my biased opinion, when the Sandman NPV is
compared with our current market cap around USD$4mil, this
represents an investment opportunity that is backed up not only by
our existing gold resource, but also by our $30 million worth of
data package, including our comprehensive Plan of Operation
permit.
The capital required to build the above mine is
modest at $28.8 M, for an all-in sustaining cost of US$1,173 per
ounce of gold.
From our Board’s perspective, a 35,000 ounce per
annum operation is not our end game goal, however the PEA indicates
that a small scale operation at Sandman could indeed become a ‘cash
cow’ capable of self-funding further exploration to grow the known
gold resources and to co-fund M&A activity. In the current
market, cash is King. Many of the world’s biggest and most
successful gold mining companies, started off small, such as by an
operation at a scale similar to our proposed Sandman PEA.
Very few exploration companies have an opportunity to
investigate a near term production scenario such as
Sandman, especially in mining friendly
Nevada.
It should not be forgotten that immense
exploration potential exists at Sandman and in the surrounding
region. The Gold Bull team believes there is significant ounce
potential in the Sandman region, targeting ‘Sleeper’ style
discoveries. Our independent epithermal advisors have reiterated
that belief. The Sandman region boasts plentiful world class
targets, many of which have never been drilled. Additional
exploration is warranted at Sandman and in the surrounding
region.
Sandman represents two opportunities in one,
exploration upside and a near term development scenario. For the
latter, the next step at Sandman is to commence a feasibility
study. Our team is already working on long lead items and
components of the feasibility study and permitting, such as
environmental monitoring and additional metallurgical test
work.
Big Balds
Gold Bull’s 100% owned Big Balds Project, also
located in Nevada is fully permitted and ‘drill ready’. The Company
made the decision not to drill its maiden program at Big Balds
within 2022 in order to preserve cash reserves during a market that
is not rewarding exploration success. Big Balds is targeting an
undercover geophysical anomaly along strike of Bald Mountain mine.
A maiden drill program will cost approximately USD$500,000 and that
drill program will either deliver a positive (new discovery
indicators) or a negative (barren geophysical anomaly), therefore
it is considered a high risk/high reward target.
M&A
In the current market, it is generally
considered cheaper to acquire existing known gold resources than it
is to drill and explore for additional ounces which makes our
M&A (merger and acquisition) discussions a vital part of our
Company’s growth strategy. We have a short list of assets and
companies that we are advancing to the next level of due diligence
in the pursuit of value adding transaction(s). In short, if we can
acquire existing ounces cheaper than we can explore for them – we
believe that represents compelling value for our shareholders.
I would like to take this opportunity to thank
everyone who supported us this year: our communities and
stakeholders, Board of Directors, accounts & admin team,
advisors and consultants, supportive stockbrokers and I would like
to acknowledge the dedication of our Nevada based technical team,
led by Regina Molloy.
Most of all, I thank you, our shareholders, for
your continued support. On behalf of Gold Bull, we wish you a Happy
and Healthy New Year.
Cherie Leeden - President and CEO, Gold
Bull Resources Corp.
About Sandman
In December 2020, Gold Bull purchased the
Sandman Project from Newmont. Gold mineralization was first
discovered at Sandman in 1987 by Kennecott and the project has been
intermittently explored since then. There are four known pit
constrained gold resources located within the Sandman Project,
consisting of 21.8Mt @ 0.7g/t gold for 494,000 ounces of
gold; comprising of an Indicated Resource of 18,550kt @
0.73g/t gold for 433kozs of gold plus an Inferred Resource of
3,246kt @ 0.58g/t gold for 61kozs of gold. Several of the resources
remain open in multiple directions and the bulk of the historical
drilling has been conducted to a depth of less than 100m. Sandman
is conveniently located circa 30 km northwest of the mining town of
Winnemucca, Nevada.
Qualified Person
Cherie Leeden, B.Sc Applied Geology (Honours),
MAIG, a “Qualified Person” as defined by National Instrument
43-101, has read and approved all technical and scientific
information contained in this news release. Ms. Leeden is the
Company’s Chief Executive Officer. Cherie Leeden relied on resource
information contained within the Technical Report on the Sandman
Gold Project, filed on SEDAR on October 27, 2022 and prepared by
Steven Olsen and Jerod Eastman who are Qualified Persons as defined
by the National Instrument NI 43-101. Each of Mr. Olsen and Mr.
Eastman is an independent consultant and has no affiliations with
Gold Bull except that of an independent consultant/client
relationship.
About Gold Bull Resources Corp.
Gold Bull’s mission is to grow into a US focused
mid-tier gold development Company via rapidly discovering and
acquiring additional ounces. The company’s exploration hub is based
in Nevada, USA, a top-tier mineral district that contains
significant historical production, existing mining infrastructure
and an established mining culture. Gold Bull is led by a Board and
Management team with a track record of exploration and acquisition
success.
Gold Bull’s core asset is the Sandman Project,
located in Nevada which has a 494,000 oz gold
resource as per 2021 43-101 Resource Estimate. Sandman is located
23 km south of the Sleeper Mine and boasts excellent large-scale
exploration potential. Drilling at Sandman is currently
underway.
Gold Bull is driven by its core values and
purpose which includes a commitment to safety, communication &
transparency, environmental responsibility, community, and
integrity.
For further information regarding Gold Bull
Resources Corp., please visit our website at www.goldbull.ca or
email admin@goldbull.ca.
Cautionary Note Regarding Forward-Looking
StatementsNeither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
This news release contains certain statements
that may be deemed “forward-looking statements” with respect to the
Company within the meaning of applicable securities laws.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
“expects”, “plans”, “anticipates”, “believes”, “intends”,
“estimates”, “projects”, “potential”, “indicates”, “opportunity”,
“possible” and similar expressions, or that events or conditions
“will”, “would”, “may”, “could” or “should” occur. Although Gold
Bull believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance, are subject to risks and
uncertainties, and actual results or realities may differ
materially from those in the forward-looking statements. Such
material risks and uncertainties include, but are not limited to,
the Company’s ability to raise sufficient capital to fund its
obligations under its property agreements going forward, to
maintain its mineral tenures and concessions in good standing, to
explore and develop its projects, to repay its debt and for general
working capital purposes; changes in economic conditions or
financial markets; the inherent hazards associates with mineral
exploration and mining operations, future prices of gold and other
metals, changes in general economic conditions, accuracy of mineral
resource and reserve estimates, the potential for new discoveries,
the ability of the Company to obtain the necessary permits and
consents required to explore, drill and develop the projects and if
obtained, to obtain such permits and consents in a timely fashion
relative to the Company’s plans and business objectives for the
projects; the general ability of the Company to monetize its
mineral resources or conduct M&A transactions; and changes in
environmental and other laws or regulations that could have an
impact on the Company’s operations, compliance with environmental
laws and regulations, dependence on key management personnel and
general competition in the mining industry. Forward-looking
statements are based on the reasonable beliefs, estimates and
opinions of the Company’s management on the date the statements are
made. Except as required by law, the Company undertakes no
obligation to update these forward-looking statements in the event
that management’s beliefs, estimates or opinions, or other factors,
should change.
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