Specialist resources fundie picks WA gold project with resource upside

When a specialist resources fund manager picks a favourite stock, it’s a good idea to give the company a good once over. Lion Selection Group’s (ASX: LSX) Hedley Widdup selected Great Boulder Resources Limited (ASX: GBR) as one of his favourite stocks, and the company is rapidly working to build on their established 518koz JORC resource in a highly prospective and historically productive region of Western Australia.

GBR has a few team members on board that long time gold investors may remember from the early 2000’s before Placer Dome was acquired for overly US$10 billion by Barrick Gold. GBR’s Chairman Greg Hall was the Chief Geologist for Placer from 2000-2006 in the lead up to the acquisition, and GBR’s Chief Structural Geologist John Beeson was a Senior Geologist at Placer Dome during most of the same period.

Hedley is also a geologist, and is particularly excited about the structural fold where Great Boulder’s Side Well project is situated. He explained that “it’s been very extensively mined on the left hand side, the western side of that fold. The right hand side of it has never been historically, seriously explored. There’s been a few historic drill holes, and there are some workings – but there’s a little bit more cover. So Great Boulder has come along and been exploring this and been discovering gold – so it looks like the fold is mineralised on both sides, which to me presents a great deal of potential upside.”

It took two years for GBR to form an understanding of the geology and drill out the project, which has culminated in an inferred JORC resource of 6.192Mt @ 2.6g/t Au for a total of 518koz contained gold. This includes a high grade core zone of 2.313Mt @ 5g/t Au that contains 370koz of gold.

Some of the stellar intercepts that came from their recent drilling campaign include 6m @ 589.44g/t Au from 114m, 14m @ 36.12g/t Au from 91m and 15m @ 35.82g/t Au from 88m. Initial metallurgical tests indicate a near perfect gold recovery of up to 99.7%.

In regard to the project’s location, Hedley is very fond of its proximity to Meekatharra – a historical and current gold mining jurisdiction. “It’s superbly located with respect to service infrastructure, and it’s also a reasonably gold processing infrastructure-dense part of the world. Meekatharra has a currently fairly substantial gold processing facility just ot the south of it, and there’s a historic gold mine just to the North with parts of an old mill”.

Given Side Well’s proximity to a raft of under-utilised gold mining infrastructure, Hedley stated that its possible to conceive the sorts of deals that might combine resources with existing processing equipment.

LSX has a long track record of creating value for shareholders and paying dividends. Since 1997, Lion Selection Group has achieved market-beating performance and generated returns in excess of $3.40/share. They currently trade around $0.435/share and have an Net Tangible Asset (NTA) backing of $0.63/share – most of which is cash ready to be deployed.

Click here to view more videos from Hedley Widdups The Insider: Meet the Fund Manager session.

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