'The Next Hemlo'

Regina Leader-Post, 1983

Regina Leader-Post, 1986

The immediate response of journalists to any drill hole discovery would be that 'one drill hole does not a gold rush make.' However, if the same journalists were promoting a discovery, then the story line would be that the discovery of a large, 6-million ounce mine with a 21 year mine life was as the result of one brilliant and lucky strike.

So how do you know when you have the next Hemlo? The next Hemlo would require a sign by the side of the Trans-Canada autoroute saying 'The Next Hemlo, turn right' and a group of dillettantes in a beard-growing competition hanging around with gushing journalists lapping up everything they're told, and wild-eyed investors throwing money at it.

Notwithstanding, there are similarities with the Hemlo gold mining site in the La Ronge gold project that should not go unheeded. Consider the geology of Hemlo and La Ronge are almost identical. The grade of Roy Lloyd is very much the same as The David Bell Mine. The Jolu mine is said to widen out with depth, much like the Golden Giant Mine had.

Consider also that GBN.V, should it table any data whatsoever which draws a closer relationship with the former Hemlo deposit, is not restricted in the least by having to divide up the property with other companies or get embroiled in legal claims as the Hemlo deposit had.

supersize: http://www.flickr.com/photos/11747277@N07/5698246044/sizes/l/in/photostream/

source: The Geology Of The Gold Deposits Of The Hemlo Area (revised edition), pg 49

(Note: If you have a Macintosh, you may have to download the pdf file of the Geology Of The Gold Deposits Of The Hemlo Area first and open it in Adobe Reader to read.)

"Operations

The mine was designed as a 3000-dmtpd (dry metric tonne per day) operation. With the Block 5 expansion, the mine shaft reached a depth of more than 5000 feet.

The mill was a conventional leach-CIP circuit. The ore was crushed to 3/8" with standard- and short-head cone crushers. The crushed material was fed to one of two grinding circuits (A-circuit = 3 ball mills, B-circuit = single ball mill). A-circuit was one of the first in the world to include the fully-automated Knelson (gravity) concentrator. A second unit was added to the B-Circuit around the year 2000. Concentrate from the Knelsons was upgraded with a shaking table. That unit was replaced with the first Acacia concentrator installed in North America.

After grinding, the ore was fed to the leach circuit where the gold was dissolved. Dissolved gold was recovered in the carbon-in-pulp circuit. Once or twice per week the carbon was treated in a 15-tonne pressure Zadra strip process. Gold was recovered from the pregnant solution on stainless steel wool cathodes in the refinery.

From 1996 onward, much of the tailings were returned to the mine as pastefill backfill."

source: http://en.wikipedia.org/wiki/Golden_Giant_Mine

Canadian Mining Journal 'Hemlo's Golden Years'

Noting the article in Wikipedia.org about the Golden Giant Mine, you read in the operations information that Golden Giant had used the same Knelson Concentrator and Acacia Reactor that GBN.V uses. GBN.V will also eventually add processing circuits much like Golden Giant had, such as an A, B, C circuit and so on.

The salient difference here is that even though the size of the mill in La Ronge is smaller by a fifth(700tpd after summer), the gold price is also ~3X higher since the days of Hemlo, and possibly set to go at least ~2.74X higher.

http://www.kitco.com/LFgif/au85-89.gif

Consider if you will how a set of mines that may only produce 4 million ounces out of the La Ronge gold project in 20 years could possibly exceed the returns from Hemlo which produced 6-7 millions of oz. (~500k oz. per year max) with a huge operation, solely due to the advance in the gold price.

Why? Because of the bull market in gold.

The Mill Zone

Google Maps seems to have updated their satellite resolution for the Mill Zone location in the last while. This makes for good viewing, someone actually put in the names of some of the lakes. You can clearly see the berms of the Mallard Tailings Impoundment Area.

Google Maps Jolu Mill Zone Location

A map that goes along with this nicely is the map that D.J. Thomas submitted to the Saskatchewan Minister Of Energy And Resources in the 1980's, prior to all the mining activity. This will help you pick out the name of the lakes where deposits are located in the Mill Zone.

D.J. Thomas' Map

Remember 'Fork Lake' is actually Star Lake and David Lake is now called 'Contact Lake.'

Something the company never mentioned in the least is the following deposit:

"1984: Starrex-Khan veins combined reserves: 230,000 tons grading 0.5oz/ton"

http://www.ir.gov.sk.ca/dbsearch/MinDepositQuery/default.aspx?ID=0889a

GBN.V took a major SGH survey in 2006/2007 of the Mill Zone of 4 km. sq., (perhaps in a 4kmX1km corridor) the results of which are not forthcoming to shareholders. The region that this covers would ostensibly be all of the deposits in the Mill Zone. Its highly likely to include the Starrex-Khan deposit as well as the Blindman Lake and Star Lake deposits.

A Number To Watch

The discount rate in the U.S. is as low as it was in the crash of 2008. If a crash happens now, or in the next couple of weeks, then the discount rate will go negative. The last time this occurred was in 1938.

The decimal point is in the wrong location, the low point on the chart is: 0.005%!!!

http://www.flickr.com/photos/11747277@N07/5697868511/sizes/l/in/photostream/

stockcharts.com

Casey Research Video

Ron Netolitzky made a speech during the PDAC in March. At the end of the speech, he mentions that GBN.V produced ~2000oz. in the last week before PDAC. This is a rate of 22g/t in the last week of February, rather than the reported grade of 10.25g/t during March.

This video will download directly to your desktop or download file:

http://c3020642.r42.cf0.rackcdn.com/ron_netolitzky_clubhouse_d1.flv

(Macintosh should open a new project in the iMovie HD and import the clip. Drag the clip to the editing strip, then export to quicktime to convert to MPEG.)

La Ronge Gold Belt, a mature mining prospect has already had:

- staking rush

- exploration dollars

- discoveries

- intermittent mining

The Flash Crash

http://www.safehaven.com/article/20842/the-forgotten-flash-crash-one-year-later

Dr. Marc Faber

http://wallstreetpit.com/72899-marc-fabers-may-outlook-beware-the-false-breakout-in-stocks

-F6