Granada Gold: Permitted for open-pit mining with resource growth potential

Granada Gold Mine Inc., located five kilometres south of Rouyn-Noranda, is currently focused on drilling to grow its gold resources, but it also has the permits it needs to begin open-pit mining, which makes it unique among the junior gold exploration companies along Quebec’s Cadillac Break.

The quartz gold veins at Granada outcrop at the surface, so digging out the mineralized material to ship to a mill would be relatively simple to do. Some of the veins have already been uncovered and prepared for mining as a result of past stripping activity at the property.

Granada’s permits are for mining 550 tonnes per day, which would amount to a sizeable 200,000 tonnes of throughput over the course of a year for a mill. Engineering studies conducted in the past have shown that this initially could produce an estimated 25,000 ounces of gold per year, with the deposit being capable of higher throughput and producing 80,000 to 100,000 ounces per year for a decade or longer.

At present, the company is actively working to expand its gold resources at the property, with plans for the following:

• Drilling around the current pit to expand the amount of reported NI43-101 pit-constrained gold resources (see accompanying table for the Feb. 2019 estimate);

• Drilling more deeply below the pit and to the north of the pit to establish an underground resource;

• Drilling at the Genesis Target northwest of the pit where magnetic anomalies indicated may be the source of the gold on the property and where initial drill holes in 2018 showed especially high-grade intersections of up to 45 g/t Au;

• Metallurgical work aimed at establishing that the very-lowgrade, gold-containing halo around the high-grade veins could also be mined economically by pre-concentrating the material before running it through a mill (testing using gravity concentration showed that one g/t waste rock could be turned into a 67 g/t concentrate). This could boost the amount of reported NI 43-101 resources and significantly reduce mill processing and transportation costs per ounce of gold produced. In the 12 years that the company has been exploring and developing the property, gold has been found in high-grade veins, and in between and around these high-grade veins – namely in the small veinlets and as free gold scattered through much of the rock.

GRANADA GOLD PROJECT: Claims and Target Locations

Underground mining in the 1930s produced more than 50,000 ounces of gold from underground workings with the grade averaging 9.7 g/t Au. At the time, it was observed that more gold tended to come out of the mill than what the assays were showing was going in (probably from the gold veinlets and free gold not included in assays). Subsequent metallurgical testing by the company confirmed this tendency, and a 140,000-tonne bulk sample from the deposit in 2007 with assays showing an average head grade of 1.35 g/t gold produced a 20 per cent higher mill grade of 1.62 g/t gold.

The Granada deposit is open for further exploration to the east along strike and the north, from surface to depth. So far the company has focused its exploration around the old Granada mine shafts on only two kilometres of the 5.5-kilometre gold structure on the property. However, to the east on the property, there are past mines with high-grade indications (Aukeko and Austin Rouyn) which have not yet been drilled (three bulk samples taken in 1938 at Aukeko averaged a grade of 240.0 g/t Au). Only 20 per cent of the Granada property has been explored.

Independent engineering reports have been produced for Granada (a PEA in 2012 and a PFS in 2014). With Canadian-dollar gold price at present higher and energy costs lower than when

those reports were produced, the company is confident that gold can be profitably produced at Granada now and for a very long time.

Additional information is available at Granada’s website at www.granadagoldmine.com.