Granada Gold: Focus shifts after high-grade near-surface discovery

Native gold frequently found at Granada. / Or natif que l’on retrouve fréquemment à Granada.

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

In August 2020 it was announced that a grab sample returned 55.6 g/t native gold from 1,220 kilograms of mineralized material taken from surface over a three-metre strike length on Vein No. 1 structure where diamond drill hole GR-19-A intersected 11.45 g/t gold from 0 to 33 metres core length (January 9, 2020 news release). A second drill rig was brought on site to focus on the high-grade Vein No. 1 structure with stripping to the west continuing along strike. The mineralized structure has been traced on surface for over 115 metres on an east-west trend by stripping. The structure extends over 500 metres when the pierce points are connected with the drill holes.

Measurement is challenging at Granada, president & CEO Frank Basa, P. Eng. explains, “Historically, the mill grades at the Granada Mine were higher than the drill grades, which is common with high-grade native gold concentration deposits on the Cadillac Trend. The 1220-kg sample returned four-times the drill grade of the core – using only the native gold component. A bulk sample is to be taken at this location to further quantify the grade of the mineralized material.”

Underground mining in the 1930s produced more than 50,000 ounces of gold from underground workings with the grade averaging 9.7 g/t gold. At the time, it was observed that more gold tended to come out of the mill than what the assays showed was going in. A 140,000-tonne bulk sample taken from the deposit in 2007 had assays showing an average head grade of 1.35 g/t gold, which produced a 20 per cent higher mill grade of 1.62 g/t gold consistent with observations decades earlier.

Drilling in 2019 focused on testing the gold grade continuity and

variability within mineralized structures. Hole GR-19-C intersected a high-grade zone with 7.67 g/t gold over 15 metres of core length from near surface to a downhole depth of 18.5 to 33.5 metres (news release from November 6, 2019.) As well, coarse, native gold was observed in the drill core of hole GR-19-E which intersected a high-grade zone of 12.32 g/t gold over two metres core length at a depth of 35.5 metres on the extended LONG Bars zone (news release October 15, 2019). The core length reported is estimated to have intersected 85 to 90 per cent of true thickness of the zone.

It is important to note that the current NI 43-101 resource calculation by SGS does not include the above mineralized zone as it was recently uncovered when stripping for a water sump. The current 2019 Pit Constrained Resource Estimate stands at 413,000 ounces gold Measured at 1.02 g/t, 349,000 ounces gold Indicated at 1.13 g/t plus 455,000 ounces at 2.04 g/t Inferred, (cutoff 0.4 g/t Au) as the press release stated on February 13, 2019.

Ongoing and planned work at Granada is to include diamond drilling focused on the high-grade Vein No. 1 structure and completing the bulk sample of high-grade Vein No. 1 targeting 500 tonnes of mineralized material to be processed at Temiskaming Testing Laboratory in Cobalt, Ontario. All completed and ongoing work is in support of a resource update expected by November 2020.

Mill permits currently allow for mining 550 tonnes per day, which would amount to a sizeable 200,000 tonnes of throughput over the course of a year. Engineering studies conducted in the past have shown that this rate could produce an estimated 25,000 ounces of gold per year, with the deposit being capable of higher throughput of up to 80,000 to 100,000 ounces per year for a decade or longer. As of early September 2020, work has commenced on the mineral resource update with modelling and pending results. The company also plans to do 50 10-metre-deep holes as part of this work.

The Granada deposit is open for further exploration to the east along strike and the north, from surface to depth. Only 20 per cent of the Granada property has been explored to date leaving a great deal of upside potential. Independent engineering reports include a PEA in 2012 and a PFS in 2014. With the Canadian dollar gold price recently making new all-time highs in the $2,500 per ounce range, and with lower energy costs than were assumed in those reports, confidence is high that gold can be profitably produced at Granada both near term and for many years to come.

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