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Promising Times Expected in New Year for Gowest Gold

As this year draws to a close, the upcoming new years offers some promising times for Gowest Gold (TSX-V: GWA), with the first months of 2011 set to offer up exciting and value adding newsflow.

In January, the company are expecting to release an updated resource estimate, which all early signs are suggesting will show some strong numbers, and pave the path for a scoping study – the next big thing for Gowest, expected within the first quarter.

Combined, these two significant releases will not only bring value to Gowest, but set the company on target to bring their flagship Frankfield East Gold Deposit into development and mining as soon as possible.

By way of background, Gowest Gold is a Canadian based junior resource company, focused solely within the prolific Timmins gold camp in Ontario, Canada. With around C$3 million in the bank, Gowest are covered with finance as far as planned exploration through the winter season is concerned, although with the potential to become more aggressive in their exploration of Frankfield, including adding another drill rig (bringing the total to 3) and extensive infill drilling, further financing may be on the cards. With this in mind, Gowest place an emphasis on quality rather than quantity as far as potential investors are concerned, with any future placements no doubt living up to this high standard.

The Frankfield site itself is accessed by a main highway and an all year gravel road, with good access to infrastructure and necessary facilities. The site has been the subject of historical drilling before Gowest came upon the project, and indeed some of this data is now being re-evaluated as part of the upcoming resource update. This already has great potential to significantly increase the resource, with the original results having considered only what was viable at the time (when the gold price for example, was much lower than it is now).

Couple this with the current infill drilling program underway at Frankfield, and it is clear the results due up in January should be a significant improvement on the already strong numbers of the previous report. The latest round of drilling has more than doubled the original mineralisation envelope, now standing at least at 750 meters (m) along strike and 750m at depth.

The ‘end-goal’ of the drill program has been to prove the Frankfield deposit as effectively, being worth the time and effort of development, necessitated by having a one million ounce resource. With this in mind, the drill program expanded exploration around the initial resource, with Januarys update no doubt going to show the key one million figure has been surpassed.

In addition to this, Gowest have been undergoing infill drilling between surface and 200m depth; the top 100m of which has been previously unexplored, as it would have required drilling from an adjacent property to hit mineralisation at a perpendicular angle. To this end, the company see this as low hanging fruit, and expect the numbers to add significantly to the Indicated category of upcoming resource estimates.

In addition, exploratory drilling has uncovered a further alteration zone similar to Frankfield, south of the main zone – which Gowest now see as a target in much need of further exploration. Unfortunately due to the location, which is effectively flooded, the site will be the subject of a winter drill program once the waters freeze over.

One positive side effect of this however, is that it is set to see a steady newsflow stream for Gowest in coming months, in addition to the larger resource update and scoping study announcements. Due to the nature of drilling at the Frankfield East Deposit, which was mostly relatively deep at depths of around 800m, newsflow has some times been thin on the ground for Gowest, who are firm believers in not releasing news for news sake.

However mineralisation at lower depths to the east, has the company strongly believing there is a plunge in the area, a point which they intend to prove by further exploratory drilling. Unlike previous drilling on the project, this will be at shallower depths (as will the previously mentioned surface to 200m drilling at the main zone, where on of the rigs on site is shallow drilling, while the other rig is drilling deeper holes), and so Gowest are fully expectant that drill and assay results will be coming in a steady stream going into the new year.

The current expectations is for mine development happening in 2012, and as previously mentioned, the main aim for Gowest is to get Frankfield into production, and start the cash flow running. In the longer term they may be interested in building their own milling and processing near the site, but in the shorter run are content to use the facilities of others, of which the Timmins district has many.

The upcoming resource update is expected to show very strong numbers, with a resource in excess of that all important one million ounce figure. The scoping study which follows this is set to show equally as robust financial figures for the project, and both are set to add value when released. 

Ongoing exploration at the site will be keeping newsflow coming at a steadier pace than has been the case previously, and although the company are clear that they do not necessarily expect any ‘elephant grade’ finds, results that are consistent with the current average levels (average grades of 6.4 grams per tonne) are the kind of numbers that get mines built in Timmins.