On the northern coast of South America sits an English speaking democracy with a parliamentary style government. Guyana also has a long-standing and stable mining act. The Aurora Mine is a multi-million ounce gold mine located in northwestern Guyana. Aurora is operated by Zijin, the Chinese gold mining company. Guyana not only hosts several large gold deposits, but it has a close geological relationship to one of the most prolific gold producing countries in Africa, Mali.
The Guiana Shield stretches over 900,000 square kilometers across northeastern South America (Suriname, French Guiana, Venezuela and Brazil) and contains multiple greenstone belt assemblages. Greenstone belt assemblages, composed of metamorphosed volcanic and sedimentary rocks, have the potential to host large, multi-million-ounce gold deposits as typified by both the Abitibi Greenstone belt of Canada and the Birimian Greenstone belts of the West African Shield. The Guiana Shield and the West African Shield are inextricably linked. These sister formations were once connected and formed a contiguous stretch of greenstone belts from northeastern South America to modern-day Mali and Nigeria.
A newly listed junior gold explorer called Golden Shield Resources (CSE:GSRI) has quietly produced some of the best gold drill results of 2022 at its Mazoa Hill Project in Guyana. A 50 meter diamond drill intercept grading nearly 10 grams/tonne gold is virtually unheard of in the gold exploration industry. It is much more common for junior explorers to drill narrower intercepts of a few meters of high-grade gold. As a seasoned junior mining investor, a 50 meter intercept of high-grade gold causes me to really take notice and try to understand the size potential of the gold deposit. Mazoa Hill hosts an existing historical resource of 350,000 ounces of gold, however, the historical drilling was limited to about 200 meters depth. Golden Shield’s geological reinterpretation of the deposit shows the gold mineralized zone extending to depth:
Recently reported hole MH-22-16 intersected multiple intervals of high-grade gold including 15 meters of 3.27 grams/tonne gold and a headline interval of 33 meters grading 3.45 grams/tonne gold.
The Marudi Mountain project contains an extensive mineralized gold system centered on the Mazoa Hill Deposit with a historical resource of 350,000 ounces of gold grading slightly below 2 grams/tonne Au. The phase 2 drill program currently underway is aimed at resource expansion to define an updated NI-43-101 resource at Mazoa Hill.
Golden Shield's reinterpretation of the geology at Mazoa Hill shows that mineralization continues into an area that was entirely undrilled by previous operators. Dr. Colin Porter, Vice President, Exploration of Golden Shield commented:
"Because historical drill holes did not intersect the lower limb extension, previous models assumed the QMC host-rock terminated at depth. However, Golden Shield's reinterpretation of the Mazoa Hill mineralization has shown that the deposit is open at depth along the lower limb extension. This will allow the Golden Shield team to continue to define a new, updated resource at Mazoa Hill, as we continue to step out laterally, and at depth."
Golden Shield is off to an excellent start at Mozoa Hill and the results of holes 17, 18 and 22 have validated management's theory regarding the lower limb extension. Golden Shield reported 10 meters grading 4.95 g/t gold, including 19.06 g/t Au over 2 meters in hole MH-22-18, and 31 meters grading 7.58 g/t gold in hole MH-22-22 (a 50 meter down dip step-out from 50 meters grading 9.10 g/t in hole MH-21-04):
Golden Shield will continue to drill Mazoa Hill to establish an updated mineral resource that is expected in Q4 of 2022. The potential of the lower limb extension of mineralization at Mazoa has the potential to add significant ounces to the property. However, GSRI also has several prospects that provide blue sky potential to the Marudi Mountain Property. These prospects include Peace Creek, Toucan Creek and Marudi North. The additional prospects all host the distinctive QMC unit that is located at Mazoa Hill, and have recorded high grade gold in trenching results at surface. Other prospects identified by previous operators that have not been systematically explored include: Mazoa Extension, NW2, NW3-5, Mam Creek, Toucan Ridge, and the Marudi North Extension.
Golden Shield CEO Leo Hathaway offered some comments on Guyana and his company's community relations:
"Guyana has a long history of gold extraction. Before the oil discovery in 2015, gold accounted for almost one fifth of Guyana’s GDP. However, it is what has happened after the oil discovery that has piqued our interest. The government has allocated almost $30 billion USD to improved infrastructure across the country. This infrastructure will benefit not only Golden Shield, but other explorers in the country. Guyana also has a stable Mining Act, that is equitable and transparent. We work closely with local communities to provide jobs and buy local products to support local communities. We also aim to have consistent and open dialogue with all stakeholders in our portfolio of projects. "
At GSRI’s recent $.53 share price, the company has a US$12 million market cap. Based upon the recent drilling at Mazoa Hill, it is reasonable to infer that this deposit hosts at least 500,000 ounces of gold grading roughly 2 grams/tonne Au. That gives GSRI a US$24 per ounce valuation for the ounces in the ground at Mazoa Hill, and infers zero value for the rest of Golden Shield’s asset package including Arakaka and Fish Creek.
Most money is made in the stock market by buying high-quality assets at low valuations, then waiting for those assets to come into favor and selling at higher valuations. Considering that comparable Guyana gold explorers/developers are valued at $50-$75 per ounce in the ground, Golden Shield has considerable room for upward revaluation.
The remainder of 2022 is jam packed with news flow and important milestones for GSRI:
In particular, the results of the remaining holes at Mazoa Hill testing the down-plunge extent of the lower limb extension will be important for determining Golden Shield’s next drilling plans. Once all results are received a follow-up program will be designed to drill deeper and explore for lateral extensions. I have initiated a starter position in GSRI shares and I am open to adding to my position depending upon drill results and market conditions.
Disclosure: Author owns shares of Golden Shield Resources at the time of publishing and may choose to buy or sell at any time without notice. Author has been compensated for marketing services by Golden Shield Resources Inc.
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