Grande Portage Resources Ltd. (GPTRF)

[Mr. Zen]

Srong Near-Term Upside Potential as Grande Portage Delivers the Goods
By Michael J. DesLauriers
05 Sep 2006 at 12:26 PM EDT


TORONTO (ResourceInvestor.com) – In late March of this year, we penned a popular piece profiling Grande Portage Resources [TSXv:GPG]. At that time we pointed out that GPG could perform very nicely as results started to roll in from its VTEM survey, and 23-hole drill program. The goal was to capture major intersects seen in historical results from the company’s Merry Widow project in BC, including numbers from the pit like 43 metres of 5.66 g/t gold and 1.36% copper.

Typical to the mining business, things took longer than anticipated to unfold, as the process of gaining permits, drills, and assay results was fraught with delay, through no fault of the company.

That means that our original target of a major upside in May-June has now been pushed to September-October, though the stock has doubled since we originally featured it.

This month and next could see a major run in Grande Portage shares if they continue to deliver the sorts of results that we have already seen. We know a few things:

All 23 holes hit major massive sulphides along large sections of core
The company tripled its land position (now 25 km strike length on magnetite-rich massive sulphide skarn system) based on highly favourable preliminary airborne data
Geologists working at the site under the direction of George Nicholson, with whom RI spoke late last week, are calling this visually the best core they have seen in 25 years
These are some encouraging reasons to believe that there could be some major excitement ahead.

Pipeline of Positive News

Last Thursday evening, Grande Portage announced gold assay results from holes 5-8 of their 23-hole campaign. This included 40.95 metres averaging 6.57 g/t gold in Hole 7, and 62.21 metres averaging 5.29 g/t gold in Hole 8. The result was 1.4 million shares traded, and a 21% jump in share price last Friday, supposedly the quietest day of the year, at the end of the summer, before the long weekend.

With the assay lab now in possession of the core from the entire 23-hole program, results are going to begin to flow, with numbers expected to come in at a rate of 3-4 holes per week for the next month or so.


If GPG can continue to deliver similar news, and it certainly appears that they can, the company’s shares could take on a life of their own, and run much higher as autumn money comes into the story. Don’t forget, 1.4 million shares traded on the latest results - a few more days like that and the sellers will be largely cleared out, putting Grande Portage in a position to run hard over the C$1 level, and quite probably closer to C$1.50-C$2 if reported grades and intervals are as rich as those announced last week.

Comparables

The ideal situation which could develop would be for Grande Portage to continue to deliver exciting numbers, with the ongoing flow of positive announcements creating a situation akin to Rainy River [TSXv:RR], or something of that ilk, where the share price has been constantly propelled by positive drill data and continued to go higher. In the case of Rainy River, from 60 cents to a high of C$3.85 over the course of several months.

This should not be a problem for Grande Portage on its Merry Widow property, because, as we noted in late-March, “With the regional aeromag map extending almost 12 kilometres in diameter, and lighting up like a Christmas tree, all indications are that Grande Portage will be able to report a multi-kilometer strike length of massive sulphides with numerous extremely large and newly identified targets.” Indeed, the company has already applied for permits to drill an additional 50 holes which should mean very little break in results flow between the 23 hole campaign now completed, and the next 50, creating constant and hopefully positive news, for months to come.

Conclusion

We see the possibility of a scenario unfolding, sparked by persistent high-grade gold and base metal grades over long intervals, of a very hot story based around a solid exploration company building something very real.

Thanks to the uncommonly high grades at Merry Widow, Grande Portage can become a market darling in short order, and the story could start to feed on itself through the momentum of weekly positive news flow. If GPG can match the results released on Thursday throughout the rest of this drill program - and all indications are that they can - look for a share price north of C$1.50 in the next 30 days.