When a company changes its name, commentators are often tempted to wonder which part of its past it’s trying to move on from. However, in the case of Gold Road Resources, the change of name from Eleckra Mines, which took place in November 2010, was more of an attempt to provide investors with a better best description of the company’s activities. All being well, Gold Road Resources has now travelled some way down the road to gold production, on what could turn out to be the fourth major gold-rich shear zone on the eastern end of the famous Yilgarn Craton in Western Australia.

Gold Road owns tenements over the 5,000 square kilometres on the Yamarna greenstone belt on the Yilgarn, and the current focus is on two mineralised trends within this structure, Central Bore and Attila. These trends are located 3.7 kilometres apart and, if developed, the ore from both would be processed at a central facility. And on these trends, several prospects stand out, including Central Bore, Justinian, Byzantium and Hann on the Central Bore trend, and Attila, Alaric and Khan on the Attila trend.

Attila currently boasts a JORC resource of 19.8 million tonnes at a grade of 1.44 grams of gold per tonne, giving 917,000 ounces of gold. But that resource has remained unchanged since September 2008, even though Gold Road has been working hell-for-leather in the district in the intervening period. And that’s because there’s more to this district than meets the eye.

Since the last resource numbers came out from Attila, Gold Road has instead made Central Bore the focus. Central Bore has already been the subject of four drilling programmes, and a maiden JORC resource is now due imminently, in March, and is awaited with eager anticipation. But that won’t be the last word as far as resources are concerned. Far from it. The company has an extensive drilling programme planned for 2011. A minimum of 65,000 metres of drilling will occur across four of the leading prospects, including Attila and Central Bore, but also including Justinian and Hann.

A quick look at the Gold Road website offers a clear indication of the company’s thinking. On the home page is an illustration of the major gold belts on the Yilgarn. The belts run roughly north to south, and progress from west to east, looking at it from a Gold Road point of view, starting with the Southern Cross Belt, moving through the Kalgoorlie Norseman Belt, and on through Leonora and Laverton to Yamarna. Whether Yamarna is the next major gold belt on the Yilgarn remains to be seen, but a join-the-dots exercise on the showings the company has already got, clearly makes a lot of sense. Of the Yilgarn gold belts, Kalgoorlie Norseman hosts the most ounces, at a whopping 120 million, while Southern Cross hosts the least, at a (relatively) paltry 10 million.

Gold Road has, in its former guise as Eleckra, long been a proselytizer for the region. But now it seems academia is catching up. Having previously been considered too young to contain major mineralised anomalies, a renewed interest in the Yamarna Belt arose after the October 2010 publication of a reassessment of the area by The Geological Survey of Western Australia. This concluded that the Yamarna belt is older than was originally thought, and that it shares characteristics with the prolific Kalgoorlie Norseman belt. That’s one tick right there. But, perhaps hard cash speaks louder. So it’s also worth noting that the famous Tropicana gold mine, jointly owned by Independence and Anglo American lies to the south of Gold Road’s Yamarna holdings.

So it’ll be interesting to see what sort of results Gold Road can come up with this year, as the drilling campaign cranks up. It’s unlikely to find itself short of money, at any rate, given a gold price of US$1,300 and more, and the possibility that it’s opening up a new belt in a wider region with a prolific track record. But there’s no likelihood of the company tapping the market in the short term. As at 31st December 2010, Gold Road had a net cash position of A$10.9 million, but with 50 million deep in-the-money options out there, exercisable at A7 cents each, another A$3.5 million will soon come into account. These current cash reserves, along with the money from the options, should provide enough money to fund the company for the next 18 months.


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