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Great Western Minerals (GWG.V) - Hoidas winter drill programme supports core valuation
Comment by Objective Capital , May 06, 2008
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Great Western Minerals completed its winter drilling programme at its Hoidas Lake rare earth elements project in northern Saskatchewan. The company drilled 32 holes to depths of up to 300 metres, for a total of 6,836 metres.
The tests extended the JAK Zone vein system by 250 metres. It now has a strike length of 1,000 metres and the deposit remains open both along strike, and at depth. The latest drilling also extended the zone at depth, as earlier work was limited to the upper 150 metres of the zone. Further, a new vein system has been identified in the footwall of the JAK vein system.
Assays are due in July from split core samples, but preliminary indications suggest the mineralisation is comparable with the rock previously tested and the company’s management expects comparable grades.
Objective's view:
Encouraged by the winter drill programme, Great Western intends to embark upon a summer programme that will test the Nisikkatch South vein system, which lies approximately ten kilometres south of JAK. The summer drilling will also test the new footwall zone at JAK, as well as some new targets on the project.
We view the preliminary results of the winter drilling as supportive of our base-case valuation of Hoidas Lake and thus Great Western Minerals Group. Our model hypothesised the company could significantly expand its existing resource at JAK. Any confirmation of this from the summer drill programme could increase our measures of confidence.
