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GoldSource Mines: With a resource expansion on the way and a plan for mid-size gold production, share prices present a buying opportunity today

 -- Published: Wednesday, 28 March 2018 | Print  | Disqus 

By Nicholas LePan,


Goldsource Mines Inc. (TSX-V: GXS) plans on developing from operating a small pilot gold mine to a junior gold producer in the coming few years with a potential production estimate of 50,000-70,000 ounces per year at its 100-per-cent owned Eagle Mountain Gold Project in Guyana.


In the second part of 2018, if the company receives successful economic Pre-Feasibility studies, from the near surface gold project and subsequently the company manages to lock in favourable financing terms limiting further shareholder dilution, Goldsource will become an exciting near-term gold producer.


The Eagle Mountain Gold Project comprises an area of approximately 50-square-kilometres in central Guyana, where the Caribbean and Atlantic oceans meet the South American shores.  The project is located 230 kilometres southwest of the capital city Georgetown and is accessible by existing roads.  There is a commercial airport at Mahdia Township which is 45 minutes flight from Georgetown and seven kilometres from the Eagle Mountain property.  


In the neighborhood, about 45 kilometres away is the historic Omai gold mine which produced est. 4 million oz of gold (Au) from 1993 to 2005. As a former British Colony, Guyana is the only English-speaking country in South America that is supported with a stable secular democracy based on British common law which helps to benefit companies operating in this jurisdiction.


Goldsource is led by an experienced management team, proven in making exploration discoveries and achieving project construction on time and on-budget.  At the helm of the company is Ioannis Tsitos who has over 29 years experience in the mining industry, having spent 19 years with BHP Billiton group. In his time in the industry, he has lived and worked in South Africa, Ecuador, Greece and United Kingdom. Originally a physicist-geophysicist, he left BHP Billiton in early 2008, where he was the Business Development manager for Minerals Exploration. He has been instrumental in the identification, negotiation and execution of more than 50 exploration agreements with juniors, majors, as well as with state exploration and mining companies.  He brings this experience to lead Goldsource as it explores the potential for a large-scale mining operation.


Following the acquisition of some strategic ground near Eagle Mountain, Ioannis Tsitos in a recent press release, said:


"We are pleased to have secured a strategic land package proximal to Eagle Mountain. Bishop Growler enlarges our gold-mineralized footprint in the area and, together with our surrounding prospecting licence, provides access to this northwestern trend for a comprehensive exploration effort. We believe the newly optioned area has good potential for additional gold-enriched saprolite, as well as mineralized hard rock. The company plans to allocate funds to further access the property and initiate exploration work in the first quarter of 2018. Our main focus remains the completion of the prefeasibility study at Eagle Mountain, as previously announced, with completion now targeted for the second half of 2018."


The company’s work at Eagle Mountain indicated the following resource size (as per NI43-101 Technical Report filed July 2014), part of which is mineralized saprolite, near surface, friable and accessible for low cost open pit mine.  The drill results and recent pilot plant operation support this method of production.




Gold Grade (gpt*)

Contained Ounces Gold










The following table shows only the saprolite (oxides) geological resources:




Gold Grade (gpt*)

Contained Ounces Gold









*Estimated at 0.5 gpt cut-off for gold.

* Source: GoldSource Mines Inc. MD&A, Quarterly Highlights, Sept. 30, 2017


Development at Eagle mountain is moving along two fronts: medium scale production and resources expansion.  The company already built a pilot plant in 2015/16 and commissioned a gravity only processing plant, open pit mine as part of its first phase.  Goldsource kept costs low by spending $7-million to build the pilot plant to enable test mining. The company achieved gold production in the second quarter of 2016.


The company operates the plant at lower volumes on selected days to collect mining and processing information for large scale mining and eventually a pre-feasibility study “PFS”. This will provide the data for operating costs, testing of different mining methods, while the company is currently awaiting metallurgical test work results.

Secondly, the company is currently conducting a drilling program to expand the near-surface saprolite resource at Eagle Mountain. Recent drill results from the program support Eagle Mountain’s plan to grow the resource and support a 4,000- to 5,000-tonne-a-day open-pit gold mine.   Most significant drill intercept from recent results is in hole EMCR17-83, with 11 metres grading 1.99 grams per tonne gold from surface.


The company has increased its planned core drilling program from 150 holes to approximately 225 holes, to be completed by the end of April 2018. Subsequently, the company plans to release an updated National Instrument 43-101 resource.


The company is targeting a saprolite expansion from 380,000 ounces of gold to an estimated 550,000 to 600,000 ounces of gold which could support a large-scale operation of 4,000- to 5,000-tonne-a-day open-pit gold mine and the results so far are supporting this plan.


According to one mining pundit, Jay Taylor, the key to Eagle Mountain is the fact that the mineralization intersected by Goldsource is right at the surface and easily verifiable using low cost auger drilling. The geometry of the mineralized bodies indicates that an open pit mine method is best and is the cheapest way to mine. Furthermore, the resource is close to surface which improves strip ratios and reduces costs and waste mining.     


In the opinion of Peter Spina and the staff at Goldseek, it presents an opportunity for investors. 


“With just over a twelve-million US market cap, Goldsource has expertise on their team to advance this into a producing gold mine which could look very favorable with high rate of returns at $1,300 gold. The potential for all in sustaining costs well under $1,000 making this junior gold mine into a very strong cash flow mining operation. Looking forward to the second quarter of 2018 when Tetra Tech Inc. is expected to release their findings in the PFS. This important milestone then will help set the course for the rest of the year and closing in on a decision towards a 50-70,000 gold ounces/year producer.”


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