The increases have to some degree been gold price related, although the gold price only started to improve from a low of ~$1243/oz on June 3 and only convincingly broke through ~$1300/oz again on June 20, and has remained above $1300 since then (currently to 1st July, despite many predictions of its demise and inability to ever rise above $1300/oz again).

Instead the rally was probably because some of the stocks had become completely oversold through tax-loss selling and comments from the ATO along the lines of such selling not being obvious, such that most of it seems to have occurred up to the beginning of June. However, in Gold Road's case its share price managed to hold ~15c during May and then recover, with further share price increases probably fuelled by its ongoing successful exploration at Gruyere and additional discoveries on the Yamarna belt.

There are not many companies that have made a significant gold discovery like Gruyere and taken it from 0 to possibly between 2 and 3moz gold (ERA estimate) within 6 months of being discovered, with a potential size of 5moz or possibly even more. And Gruyere appears to be only the first significant discovery in the Yamarna for Gold Road.

The Yamarna Greenstone Belt was thought to be the last major NW/SE striking greenstone belt before the eastern edge of the Yilgarn Craton is reached. This is the first time I/ERA have visited the Yamarna greenstone belt and I was surprised by how close it is to Laverton in WA and that to get there is mostly on a top-class dirt road, being the inland highway that connects through Warburton to Alice Springs.

There is speculation that the possibly ~10moz Tropicana mine lies either in the Archean within the Yamarna greenstone belt, or whether it is reworked Archean thrust over the Yamarna belt (being at the intercept SE on strike of Yamarna and the NE/SW trending Albany-Fraser belt). Tropicana also appears to lie at the junction of a jog in the Albany-Fraser belt (along the southern and south-eastern edge of the Yilgarn Craton), and a NNE/SSW "crack" in the surface of Australia (visible in aeromag).

There are very few old workings that we saw (only near Jutson rocks, mined lodes striking NE/SW and a stope down dip NW/SE), which are thought to date to about the late 1800s/early 1900s (based on the many soldered tin can lids lying around). BHP explored Yamarna in the late 1980s, discovering Breelya in 1988, followed by Metal Mining Australia discovering Attila on the Yamarna structure in a JV with local prospectors in the early 1990s, then Zanex defining Attila in 1994, and Asarco then farming-in.

From 1995 to 2001, WMC in a JV with Kilkenny focused on the southern part of the Yamarna belt especially in the Breelya area and constructed the now partly overgrown Mt Fleming airstrip (near Minnie Hill). Interestingly the most recent high grade discovery (since Gruyere) in late May 2014 in the Sumitomo JV (Southern Yamarna) area, was 12m @ 4.7g/t (incl 4m @ 8.3g/t) at Minnie Hill South in a differentiated dolerite.

WMC pulled out when their exploration division closed down, and was followed by Anglogold and Terragold in a JV from 2002 to 2005 applying aeromag. In 2005 Faulkner Rsc re-consolidated the belt and listed as Eleckra Mines (EKM) in 2006 which was renamed Gold Road Resources in 2010, after the high grade Central Bore discovery in 2009.

The Yamarna greenstone belt had acquired a reputation of 'plenty of "sniffs" (mineralisation), but doesn't tie together'. Our (ERA) examination of the RC chips and drill core, observed that as illustrated by the Central Bore and Gruyere discoveries, the area appears to require diamond drilling to unravel what is "going on", as it seems to be too difficult to interpret the internal rock structures based solely on RC chips.

One doesn't appreciate what Gold Road has achieved in their presentations, unless time is spent going through the information, presentations and a detailed on-site visit to the Yamarna greenstone belt (I spent about 5 days on-site there in March 2014), east-west in about the middle, north for ~100km, south for ~100km.

Over about a two year period, Gold Road flew detailed aeromag over the entire Yamarna greenstone belt, and compiled the historical data with regional gravity, radiometrics, SAM, Aster Landsat, and international comparisons to other orogenic models such as Finland, which also has glacial overburden. GOR also observed what marked other orebodies, such as the influence of redox (supported by coincident arseno and moly anomalism), perceived basin centres (GOR analysis) and structural changes at Red October and Sunrise Dam. (It is the first time that I have seen a correlation between Red October and Sunrise Dam - in that they are on the same perceived centre-line of a basin).

Gold Road hence followed up with structural and basin studies in 2012 and geochem redox targeting in 2013, to result in the nine ~10km to ~20km long elliptical gold camp targets, (5 major, 4 minor) based on basin centre-lines, structural targets and redox targets (supported by coincident arseno and moly anomalism), and applying comparisons to other goldfields in Australia and the world.

YAM14, a redox target with a coincident structural target on a flex (or directional change) in the perceived centre of a basin was drilled first in May 2013 by auger and delineated as a ~2km gold anomaly in July 2013. Commenting that the auger method was too slow, GOR switched to RAB/interface (a method that drills to the interface between the sand and the top of the Permian [often only ~1m to 5m below surface] and results in an acceptable geochem signature).

GOR drilled Gruyere on a 50m x 400m spacing, with occasional holes drilled to refusal (up to ~30m below surface). Gruyere was a structural target on a perceived basin centre, and the RAB/interface programme delineated a ~900m long anomaly with a highest grade of 174ppbAu (which is relatively high for a new potential goldfield).

Gold Road started RC drilling in September 2013 and reported the assay results in October 2013 on both Gruyere and YAM14. Gruyere being a ~400m long mineralised gold zone up to 180m wide (section F) and >88m deep with intersections such as 52m @ 1.23g/t & a number of composite assays of 2m to 4m @ ~3g/t. In comparison YAM14 was ~200m long, up to 75m wide to a depth of 80m with intercepts such as 16m @ 2.1g/t and a high of 4m @ 7.7g/t.

Ziggy Lubieniecki (Gold Road's Technical Director) commented that RC drillhole No 14 (on section E, now 49,825N) as shown in Figure 1, was probably the discovery hole for Gruyere, because after they drilled it, he knew they were onto something. The dramatic progress to possibly ~2.2km long on strike by 25m to 180m wide and to >600m depth in only ~5 or 6 months so far, has achieved a potential resource (so far : ERA estimates) of ~2moz to 3moz (or more).

The initial interpretation of Gruyere was that it appeared to be a dilation "jog" of a tonalite intruded into a shear zone, in a sequence of intermediate volcaniclastics and mafic basalts. The host rock of Gruyere was initially thought to be a tonalite, however, it has since been identified as being a tonalite-porphyry, in contrast to other tonalites in the Goldfields, such as Phoenix Gold's Castle Hill, which appears to be a tonalite-granite.

The whole rock mass at Gruyere appears to be a porphyry dyke and hence can be sheared, compared to coarse granites which generally have a restricted and brittle fault behaviour. This results in potentially significantly more deformation which coupled with appropriate reactive rock chemistry can result in a much greater extent of mineralisation. There also appear to be a few distinct NW/SE striking almost vertical barren mafic rafts/dykes through the Gruyere porphyry.

The tonalite-porphyry underwent brittle fracture resulting in a series of flat east-dipping lode-zones as shown inset in Figure 1. The mineralisation occurs against a background of disseminated sericite-pyrite alteration, with the gold associated with non-refractory chlorite-sulphide and biotite-sulphides. The highest grades mostly occur with biotite-albite alteration phases and discrete lode structures. Examining the drill cores of 14DD08 and 14DD07 showed that the higher grades also appeared to be associated with fracture (or black) lines, sulphides and quartz (also shown inset in Figure 1).

Although the average grade was 1.0g/t over the 284m (from 12m) in the first diamond drillhole (14DD01), there were a number of higher grade intercepts of >4g/t over 1m. The 8th diamond drillhole (14DD08) also has an average grade of 1.2g/t (over 560m) and was drilled north down the system to check continuity, but has a number of higher grade intersections, even visible gold (the first we have seen at Gruyere) in quartz at ~501m downhole.

In ERA's opinion, the variability of the rock types and mineralisation infers that Gruyere has been injected by multiple phases of intrusion over a period of time (multiple activity in orebodies is usually viewed favourably).

In addition to rock variability, Gruyere appears to have two higher grade shoot directions, one in cross-section dipping to the east, and another in long-section plunging to the south. The long-section >1.5g/t potential ore shoots have been shown in March 2014 releases, however, there also appeared to be a higher grade inner component to the ore shoots (>2g/t or >3g/t) - which has since been verified in more recent reported intersections since then.

The long-section link is from 14DD08 (at about section H, or ~50200N) to section N (in the north, ~50838N) with 13RC53's 34m @ 3.34g/t from 108m (which rises to a peak of 13.2g/t [followed by 9.8g/t] over 1m) or the diamond tail of 14DD07 which has a peak value of 12.8g/t.

A consistency of grade over a significant interval was also noticed in RC drillhole 14GYRC0034 (on section g, or ~50100N), possibly suggestive of a conjunction between east dipping higher grades and a southerly plunging ore shoot.

Diamond drillhole 14DD04 is located on the western side of Section D (in about the southern end of the widest part of the Gruyere porphyry, at ~49725N, or in the Main Zone), and appeared to represent another style of mineralisation with its 52.1g/t intersection over 1m from 187m downhole apparently mostly in a quartz-carbonate vein.

A number of the core lengths in 14DD04 showed the light brown coloured albite-sericite alteration of the tonalite, plus quartz-carbonate veining and sulphides. While a 1m @ 18.0g/t intercept had very clear sulphides such as a distinctive (non-refractory crystalline) arsenopyrite vein on the boundary between albite-sericite altered porphyry and a quartz-carbonate vein, and a 24.3g/t intercept appeared to also be associated with numerous fracture lines.

Gold Road reported that it had completed its most recent 23.75km, 117 drillhole programme in the 10 weeks to June 23 and was now into resource estimation with the maiden mineral resource for Gruyere on target for completion in the Sept Qtr 2014, after which a detailed scoping study was planned to commence.

Since then, on June 25, Gold Road reported its Toto anomaly discovery located about half-way between Gruyere and YAM14 on the Dorothy Hills trend, starting ~2km south of Gruyere. Toto was discovered from RAB interface drilling and is an anomaly ~3km long x 1.2km wide consisting of 3 distinctive parallel ~N/S trends that are >15ppb.

Gold Road intends to undertake follow-up Aircore over the peak areas of the Toto anomaly, testing for gold mineralisation and other pathfinder elements, and then follow-up that with an RC programme.
Gold Road has shown with its Gruyere and following discoveries the advantages that it has gained from stepping back and taking the Yamarna greenstone belt "back to basics". Even if that meant a "two year semi-boring period as far as the market was concerned". And the result has been material share price appreciation, even from the latest issue at 17.5c per share.
Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd.
Figure 1. Ziggy Lubieniecki at Gold Road's Gruyere Discovery