(GSL.L) Greystar Resources Ltd Buy/Sell

March 25, 2008
Greystar’s David Rovig Knows The Value Of Nose-Rings And Much Else Besides

By Alastair Ford

“At the end of the day”, says Greystar president David Rovig, “gold is what all currencies are measured at”. That sounds like the start of a very interesting debate, part economic, part philosophic, in which the merits of the world’s relative measures of value are called into doubt. Just what is a currency worth? Perhaps it’s simply what you can buy with it? But trade currencies and then travel across the Atlantic in either direction, and you’ll notice that the price you paid for the money is in no way relative to its purchasing power at your point of arrival. And it’s no accident, either. It’s a deliberate policy of the Fed. So if the Fed is messing with the folding stuff in our wallets, isn’t it worth considering holding a bit of the yellow metal ourselves, just to be on the safe side? And isn’t it the case that dollars are in fact priced in gold, rather than the other way round? It would certainly be a fillip for fans of the long abandoned Bretton-Woods agreement if that were so. So if gold is still the real store of value, just as it’s always been, then what better business to be in than making margin mining it out of the ground?

That’s a quick in-the-pub-version of the classic gold bug argument, and, although trained economists can pick holes in it quite easily, the strength of the gold price at the moment is making more noise than any negativity from proponents of the dismal science. Because there’s a further point to be made about gold - it’s easy to understand. Gold is a metal that comes out of the ground. It’s simple. It’s not a credit derivative, or an equity with a nominal valuation quite different from its real one, it’s not something you can print or issue more of on a whim, or manipulate interest on, or re-package and re-sell, and underwrite under another name. So far there haven’t been any bankers who’ve gone bust going long on gold.

And David Rovig makes a further interesting observation: “the price of gold nose-rings”, he says, “is up by only a tiny amount”. In other words, the consumer buys gold in such small quantities that, although the price rises do get passed on, the current strength in the gold price doesn’t hurt him or her in the same way as a strong or a weak currency might, or higher or lower interest rates might. Or the credit crunch might.

Even if the price of nose-rings is not something that one would think would have an immediate impact on Greystar Resources, all this wends its way back to a simple fact about the company: it’s sitting on 10.15 million ounces of gold measured and indicated up at its Angostura project in Columbia. There’s a further 3.4 million ounces in the inferred category. That’s a resource base that most juniors with an Aim-listing in London can only dream about. It’s reasonably impressive for Toronto too. And the discovery cost per ounce isn’t bad either – US$4.20. Compare that to a gold price dancing around US$1,000, and you can see why Mr Rovig likes talking about gold, nose-rings or otherwise.

He’s got to get the money to dig it up, of course. But Greystar’s long-standing London broker Ocean Equities is pretty confident that finance can be found. It could hardly be otherwise. With the notable absence of RAB, Greystar boasts almost every big London name on its share register, not to mention a few impressive North American ones. Any equity raising ought to be a walk in the park, even with the current market jitters. And banks must be falling over themselves to back gold projects, for the very reasons outlined above.

Still, that’s all a little way away. Mr Rovig reckons he’ll need an initial US$350 million to get a heap-leaching operation up and running, and a further US$100 million to put in a biox and leaching facility to process some of the more recalcitrant ore. The second, however will more than likely be financed by cashflow from the first. A

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Greystar Feasibility Study Progresses in Colombia

By Andrew K. Burger
24 Feb 2008 at 11:20 AM GMT-05:00

BAKU, Azerbaijan (ResourceInvestor.com) -- The pieces are coming together for Greystar Resources [TSX:GSL; AIM:GSL] as it moves towards completing a feasibility study for the Angostura deposit in northeastern Colombia. Progress is being made regarding efforts to determine and evaluate metallurgy, rock mechanics, environmental monitoring and infrastructure requirements, as well as strengthening community relations, according to a Feb. 20 media release.

Aimed at upgrading intervals of higher grade gold-bearing ore from the Indicated to Measured Resource category Greystar is carrying out a 40,000 metre in-fill diamond drill program in selected areas, an effort that is expected to be completed in Q3 2008.

Tonnage estimates at Angostura increased 8.4%, gold grades rose 2.6%, and Measured and Indicated Resources increased 11.1% following the completion of a similar effort within the core of the deposit’s Perezosa tunnel in 2006, Greystar executive vice-president Frederick Felder, noted in the release.

“The current drill program is in the early days but the values from the late 2007 in-fill drill program are showing confirmation of the continuity of higher-grades with hole DM07-12 returning 13.87 grams gold per tonne over 5.25 metres and 17.24 grams gold per tonne over 5.4 metres,” he added.

Opening Up Angostura

Greystar holds mining concessions covering just over 30,000 hectares in northeastern Colombia near the Venezuelan border 55 kilometres by road from Bucaramanga, a city of approximately one million people.

Management has steadily and in a cost-effective manner been defining and expanding Angostura’s gold and silver resources. Nearly 267 thousand metres of drilling has been completed as of February. Inferred Resources were converted to the Indicated Resource category at a 246% rate between 2004 and August 2006 at a cost of C$4.20 per ounce.

According to a December 2007 resource estimation update, Angostura hosts an NI 43-101 compliant Measured Resource of 88.49 million tonnes of gold and silver grading 0.79 grams and 4.0 g/t, respectively, and an Indicated Resource of 145.826 million tonnes grading 1.69 g/t gold and 8.0 g/t silver.

This translates into 10.15 million ounces gold and 37.76 million ounces silver, which is contained in 234.32 million tonnes of material grading 1.35 g/t gold and 7.3 g/t silver, according to company information. An additional 3.43 million ounces of gold in 77.7 million tonnes grading 1.37 g/t is estimated and categorized as Inferred Resources.

Latest results from the 25-metre interval in-fill drilling program also included 5.16 g/t gold over six metres, 3.72 g/t gold over 10.65 metres and 40.4 g/t gold over 3.85 metres. Higher grade intervals were not drilled to sufficient density in the company’s December 2007 resource estimate to qualify as Measured Resources according to NI 43-101 criteria. Some two-thirds of Greystar’s 2008 drilling program will be dedicated to upgrading and better defining these higher grade intervals, according to management.

Determining Feasibility

Drilling activities currently underway also aim to improve Greystar’s understanding of areas of the Angostura deposit outside Perezosa, as well as identify new targets. Underground development work at Perezosa includes more than 2,500 metres of drilling from 56 drill stations

Underground work is progressing at Veta de Barro, where the deposit has been opened approximately 200 metres higher above the workings at Perezosa. Drilling has advanced 85 metres and a 158-metre pilot drill hole from within the drift has been completed.

New target exploration is underway and the first drill hole testing to 409.1 metres has been completed at the Las Animas target approximately one kilometre south of the main Angostura deposit and the diamond drill rig is being moved 250 metres south.

Moving to

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December 27, 2007
Greystar’s Angostura Deposit Is Of Size To Attract A Predator


Back in 2004 when it was hardly a year old Ocean Equities acted for Greystar Resources when it decided to get a dual listing on AIM. Its reasoning was simply that London was more pragmatic about companies operating in Colombia than North Americans. Ocean Equities proved that it had the ability to pick clients as Greystar has gone from strength to strength over the intervening years and does not appear to have encountered any serious political problems in Colombia. The company’s focus is on the Angostura gold silver deposit in the north east of the country and it is now preparing for a feasibility study on what should prove to be a long life mine.

In the last couple of days Greystar has come out with a revised resource estimate of 10.15 milion ozs gold and 49.84 million ozs silver in the measured and indicated categories. This is 37 per cent more than the indicated gold resource estimate at the end of last year and now represents 75 per cent of the total gold in the mineral resources. Frederick Felder of Greystar points out that “this new resource estimate continues to show the expansion potential of the very large Angostura deposit. The addition of measured resource estimates marks a milestone for the project and Greystar’s exploration team will focus on further expansion and upgrades at Angostura, with particular attention to lowering the waste rock ratio and examining a staged production scenario starting with the oxide mineralization and transitioning into the sulphide material all leading to a feasibility study starting in 2008”.

Ocean Equities is clearly delighted with Greystar’s progress and highlights the fact that a significant portion of the previously indicated and inferred resource has moved into the measured category. This resource update includes results up to October from 717 drill holes totalling 244,443m and is an update from December 2006. During that time the resource in all categories has increased from 11.6 million ozs to 13.6 million ozs and it is worth noting that plenty of junior gold exploration companies have considerably less than 2 million ozs as a global resource so Greystar stands out as a success story on a world scale.

The ounces in the measured and indicated categories now total 10.2 million ozs which is 75 per cent of the global resource, compared to 7.4million ozs which was only 64 per cent of the global resource previously. This greater confidence will improve the economics of the deposit as it is highly likely that a greater number of ounces will now be mineable than previously considered. The grades of the new resource statement are consistent with previous levels and the grade of the measured and indicated ounces is 1.35g/t, a negligible increase from the previous 1.33g/t and Ocean Equities is happy that the grade of the potential run of mine ore remains the same.

The broker then goes on to say that more important for the economics of the project than the increase in total ounces is the increased numbed of ounces of oxide material, which is now 2 million ozs grading 1.07g/t in the measured and indicated categories compared to the previous 1.5million ozs at 1.13g/t. This increase of half a million ounces should have two very positive effects on the economics of the mine for two reasons. First, the estimated recovery from oxide material is 91 per cent as opposed to just under 80 per cent for sulphide material which means that a greater number of ounces will be recovered from the ore at no extra cost as the ore would be mined and processed in exactly the same way whether it was oxide or sulphide. Second, it is looking increasingly likely that the staged process of an oxide only operation moving to a full oxide + sulphide operation will be achievable, which will reduce the
initial capital required for the project.

Interestingly Greystar now seems to be trading at an enterprise value of US$

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Colombia announces gold find that could double production by 2011

The Associated Press
Thursday, December 27, 2007

BOGOTA, Colombia: Colombian authorities have announced a major gold find that would double the country's production of the metal by 2011 and which they claim could prove to be one of the 10 biggest deposits in the world.

A foreign mining company uncovered the deposit and informed the government, which announced the discovery last week but said details would not be released until February.

But President Alvaro Uribe appeared unable to hide his excitement last week.

"How am I going to keep a secret this big until February?" Uribe asked in a Dec. 20 speech, revealing that Mining and Energy Minister Hernan Martinez had that morning told him of the discovery, which will require an initial US$2 billion (€1.38 billion) investment and will double the nation's gold output by 2011.

Authorities didn't give the name of the foreign mining company, but Bogota's El Tiempo newspaper reported that the deposit is in the central state of Tolima, and was discovered by Johannesburg-based AngloGold Ashanti Ltd., one of the world's largest gold producers.

Charles Carter, spokesman for the company, on Thursday confirmed that the company has an active exploration program in Colombia, but declined to comment on El Tiempo's report, saying it was "premature to discuss" any of the company's specific findings.

AngloGold Ashanti has projects in 10 countries on four continents, including the U.S., Brazil, Russia and China, its Web site states.

The company has been actively exploring for gold in Colombia since 2000, and has two large drilling projects in the country's center, along with six other "early-stage" projects.

High gold prices, which have nearly tripled in the last ten years, are pushing mining companies to boost exploration efforts, the Bogota-based newspaper said.

But in Colombia, yearly gold production fell by more than half last year to 15.7 tons from 37.7 tons in 2005, El Tiempo reported, citing the nation's mining institute, as attacks and harassment by leftist rebels forced many mines to close.

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....says GSL is a "re-rating play".
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36 Toronto gold juniors sorted

RBCCM offers a guide to valuations, near low points of the past year, for stocks ranging from Etruscan to Mundoro.
Author: Barry Sergeant
Posted: Thursday , 27 Sep 2007

JOHANNESBURG -

For the past year or so, analysts at RBC Capital Markets have tracked more than three dozen Toronto-listed non-producing gold companies, in terms of adjusted market capitalisation (AMC) per ounce. The group average has hovered between $50-$75 an ounce, with the current average of $56 an ounce being at the low end of the range.

The AMC method adjusts actual market capitalisation by adding long-term debt and deducting working capital; this is then divided by ounces in the ground. Measured and indicated ounces, the most confident, can be applied. The less confident, and wider categories of measured, indicated and inferred ounces, can also be applied.

On the latter basis, the ranking puts Etruscan (EET.T, C$3.05 a share) at the top of the log, with $140 per ounce, as calculated, and Mundoro (MUN.T, C$0.67) at the bottom, at a mere $1 per ounce. The RBCCM analysts advise that investors should not, however, simply buy the cheapest; i.e., stocks offering the lowest AMC/oz.

The AMC/oz metric is seen as simply a starting point for the analysis of attractive early-staged investing, given that "some stocks trade at low multiples for good reasons". Instead, RBCCM's preferred strategy for investing in this group entails the search for opportunities where the analysts believe that a gold project, or projects, can either advance to development, and ultimately become a producing mine (known as a re-rating play), and/or where increasing resource bases will be rewarded in the share price (exploration plays).

Within the category of re-rating plays, the analysts are looking for projects/companies where it is believed that the current resource base will be re-rated by the market as the project/s advances. For example, current development-staged projects trading at an average AMC/oz multiple of $56/oz, can become Tier III orTier II mines that command higher AMC/oz multiples (with current averages of $158/oz and $239/oz, respectively).

Examples of what RBCCM considers as re-rating plays would include Anatolia Minerals (ANO.T, C$5.75), Greystar Resources (GSL.T, C$6.74), and Gabriel Resources (GBU.T, C$2.37).

In the category of exploration success plays, the analysts look for projects where it is believed that there is both above average potential to increase the resource significantly, and that the market will reward the shares for exploration success (for example, Osisko Exploration, OSK.V, C$5.20).

The analysts say that examples are often seen where there remains above average exploration potential to expand the resource base, but where it is evident that the market is more focused on project advancement (such as completing the feasibility study, obtaining permits, securing financing, and so on) and therefore unlikely to reward the company for adding reserves or resources. Examples cited are Gabriel Resources and Crystallex International (KRY.T, C$2.79).

In terms of absolute stock price performance, the 36 stocks mentioned are on average currently trading 30% below 12-month high stock prices. On this score, the top performing stocks include Comaplex (CMF.T, C$5.20), Detour Gold (DGC.T, C$7.25) and International Minerals (IMZ.T, C$5.74), currently all trading close to 12 month highs. Comaplex's major area of interest is Nunavut; for Detour, it's Canada, and for International Minerals, Ecuador.

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Colombia could be 'very good gold frontier' in near future - AngloGold
By: Martin Creamer
Published: 17 Aug 07 - 8:34
Colombia could prove a “very good gold frontier” for the company in the near future, retiring AngloGold Ashanti COO Roberto Carvalho Silva said in Brazil on Thursday.

Carvalho Silva said that the company’s two promising exploration-drilling projects in Colombia were at Gramalote and La Colosa.

“We are expecting the first metallurgical results at the end of August for both,” AngloGold Ashanti geologist Leonardo de Souza reported.

“The chances are good for those two projects. Everyone who knows about exploration knows that we are in a very early stage there.

“However, we believe that Colombia could be a very good gold frontier for us in the near future”, Carvalho Silva said.

Thirty holes had been drilled at Gramalote and four at La Colosa.

Carvalho Silva said, however, that with greenfields exploration, it was not only a question of finding a sufficient resource through drilling, but also one of establishing whether or not the resource was mineable and whether the ore from it was treatable.

He said that AngloGold Ashanti required a minimum size of two-million mineable ounces in order to go ahead with a project.

De Souza estimated that there was indeed a two-million-ounce inferred resource at Gramalote and an even bigger one at La Colosa.

If all criteria were met, it would take six years to develop the projects, Carvalho Silva estimated.

“We need time at Colombia. A programme of this nature will require nothing less than six years,” Carvalho Silva said.

Drilling of bulk-tonnage gold targets had continued at Gramalote, in the second quarter of this year and additional infill drilling would be undertaken there in the second half.
'We established a strategy for Colombia at a time when nobody else wanted to go there'

The results of first-pass drilling at the La Colosa gold-copper porphyry were described as “encouraging”, and it was pointed out that the polymetallic deposit offered the possibility of by-product credits.

Carvalho Silva said that general conditions in Colombia were good, the government effective and “we are in that sea and swimming quite well”.

He said that the company had been on the ground in Colombia since 2003.

It had chosen Colombia because of other South American countries being “too mature” from an exploration perspective, which had resulted in AngloGold Ashanti becoming the “first kid on the block”.

“We established a strategy for Colombia at a time when nobody else wanted to go there, assuming country risk and so many other things,” said Carvalho Silva, who leaves the company next month.

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June 04, 2007
Greystar Resources Gets Itself In Shape For An Approach By A Major


As our Canadian Correspondent pointed out over the weekend the reaction in the market to the positive scoping study at its Angostura gold project in Colombia was odd to say the least. Here was a study which confirmed that the project would produce an average of 395,000 ozs gold and 1.3 million ozs silver over the next ten years at a cash cost of US$276/oz after silver credits and the share price drifted down C10 cents to C$8.05. Dave Rovig, the chief executive, explained to Minews this was only a scoping study, not a feasibility, and that Hatch had deliberately used conservative figures as with gold which was assumed to be US$500/oz for this exercise.

To an extent it can be said that Greystar has been a victim of its own success. Some 18 months ago the shares topped C$13 after a succession of excellent exploration results, but Guy Wilkes, the head of Ocean Equities which brought Greystar to a secondary listing on AIM in 2004, points out that there was a certain amount of takeover hope in the price at the time as a number of large producers were known to have signed confidentiality agreements with the company. It is very hard to maintain such excitement over a long period despite good results and there were some worries over the metallurgy at the time. This has been solved with bio-oxidation treatment of the higher grade sulphide ore and investors now seem to be concentrating on the fact that a major funding is in the offing to pay for a full feasibility study and development of the mine.

RBC Capital Markets will be leading on this, with help from Ocean Equities, and the interesting aspect will be the division between debt and equity. The total capital cost is estimated at US$520 million with an additional US$144 million required for capital leasing of mine fleet equipment. A total of US$664 million is a hefty sum to raise, but JP Morgan Cazenove has shown that it is possible and there may be recourse to Norway as there is increasing evidence that its huge oil funds are seeking other resource investments at just the stage that Greystar finds itself. The larger the equity component the less power there is to banks to introduce hedging programmes and this appeals to investors who want maximum exposure to the gold price.

The scoping study envisages an open-pit operation with the oxide material processed as a heap leach operation and the higher grade sulphide material processed via a mill, floatation and bio-oxidation. RBC Capital Markets reckons that the bankable feasibility study, which is scheduled to start within the next few months, will take around 12 month to complete and the fact that the brokers see the scoping study as extremely positive bodes well for the final outcome. They also point out that there are very few gold projects globally at this stage of development and of this size and seize on the fact that the capital costs have been estimated on a very conservative basis.

Historically, large bulk tonnage low-grade heap leach gold deposits are developed in stages with the oxides being exploited initially as a separate heap leach only operation, followed by a sulphide operation that comprises hybrid processing technology. In the case of Angostura the flow sheet, as far as this scoping study is concerned, proposes a unified oxide-sulphide operation that entails a much larger initial capital cost outlay than would be the case with starting with an oxide only operation. In the past, Greystar had also considered a staged approach to the operation with an initial oxide phase operating for several years followed by a more capital intensive mixed oxide and sulphide operation as the mining of the sulphides becomes necessary. The advantages of this from a funding point of view are obvious as the oxide operations is comparatively cheap and generates cash flow ahead of the requirements for the sulphide operation.

A y

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Greystar sees sweet prospect
Companies: GSL
30/05/2007

Gold and silver hopeful Greystar Resources says an independent study suggests revenues of £232 million to £296 million from Angostura in Colombia.

Vancouver-based Greystar cites an independent scoping study by the Hatch consultancy showing potential cash flow from an open-pit operation at Angostura over an 11-year mine life ranging from $464.6 million (£234.6 million) with the gold price averaging $515 an ounce (against $658 today) and silver at $9 an ounce (against $13 now) to $593.6 million, with an average $545 gold price and silver still at $9. The study envisages provisional open-pit reserves of 6.8 million ounces of gold at a low grade of 1.28 grammes per tonne of ore and 31.2 million ounces of silver at 5.82 grammes per tonne.

The Hatch study suggests cash costs, before capital expenditure, of $276 an ounce of gold, after taking silver credits into account, and envisages an initial capital cost of £190 million, with another £70 million over the life of the mine. AIM and Toronto-quoted Greystar, which had £121 million in the bank in April, says it has enough money to take it through to commissioning a bankable feasibility study info the Angostura project, though it might ‘top up’ its cash before then.

Greytstar shares, which have swung between 97p in 2004 and 585.5p a year ago, were recommended by Growth Company Investor as a ‘speculation’ at 114.5p in October 2004 and as offering ‘more growth’ at 275p in August 2005. Now 385p, valuing the company at £147 million, they should outperform several sector peers.
Robert Tyerman

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..with a mention of GSL.

http://www.fdimagazine.com/news/fullstory.php/aid/1849/Colombia_comes_out_of_the_shadows.html

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January 04, 2007

Greystar Has A Cracking Deposit At Angostura.

By Rob Davies

When someone says they have an 11 million ounce gold deposit you have never heard of yet is listed on AIM the first response is to ask where’s the catch. Quite simply the answer is that the deposit is in Colombia and the sulphide ore is refractory. For some people that would be the end of the story and they would move on to another country and an easier orebody. But that kneejerk reaction could be premature. Colombia, like many countries, is quite a different place from even a few years ago. Many people seem happy to accept change in the former Soviet republics and in parts of Africa that have been off the mining map for decades. Yet South America seems less susceptible to changing its global image. Columbia is tainted with its drug problems even though it is only one of two countries in South America, Chile is the other, that has retained its investment grade for government debt. And it hosts a number of world class coal and nickel mines. The security problem is being addressed by deploying more police and army units into rural areas. That said it cannot be denied that it has had its problems in the past which have left it relatively unexplored.

One company that is taking advantage of this knowledge gap is AIM listed Greystar Resources with offices in Vancouver and Billings, Montana. For three years between 2000 and 2003 the company had to suspend its operations for security reason, but it has been in the country since 1994 so it knows the ropes. Greystar owns the Angostura property in north-east Columbia, not far from the Venezuelan border and 55 kilometres from the town of Bucaramanga which has a population of one million and good infrastructure. Greystar has had the property since 1995 when Kinross was a major shareholder. David Rovig, formerly of Kinross, is now the President.

Angostura sits in hilly terrain at an altitude between 2,600 and 3,400 metres above sea level and the deposit has been investigated by 167 kilometres of drilling and a two kilometre exploration tunnel. That work has identified a two kilometre by one kilometre gold-silver epithermal deposit hosted in a swarm of north-east trending and steep dipping structures containing sulphide mineralisation. This structure stands out as a resistant ridge which will lead to a low strip ratio, although the patchy nature of the mineralisation will generate internal waste of about 3:1. It is this uneven distribution of the metals which has resulted in a classification of only inferred and indicated resource status, albeit of 11 million ounces of gold and 47 million ounces of silver.

While the resource is large the fact is that only about two million ounces is in oxides with the remainder in sulphides that are refractory and will require considerable effort to extract. The oxide material might be enough for a starter operation, but to fully exploit the resource some process to tackle the sulphides needs to be found and that seems to be the sticking point at the moment. While an oxide plant might cost US$100million, a plant to treat the sulphides could be in the region of US$330million taking the total cost towards US$500million. Operating costs will not be in the lowest quartile at US$350 an ounce on a cash basis, although they will be lower in the early years when the oxides are processed. Nevertheless, even after adding fixed costs of say US$100 an ounce that still leaves a 20 per cent margin at current prices. Mining will be open cut although the materials management side will be complex due to the sheer volume of rock and the steep hillsides in addition to the problems caused by the internal waste.

The key to unlocking the value of Angostura lies in selecting the right metallurgical process to release the gold. The scoping study due out early next year will provide a lot more detail on that and other issues. Once that has been determined investors

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http://www.minesite.com/storyFull5.php?storySeq=3864

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Greystar mentioned in this story

Colombia Hosts Its 2nd International Mining Fair At The End Of This Month.

Although Colombia has a fascinating history of mining dating back to Spanish times, progress was held up in recent years by the continuing armed conflict between insurgents funded by the drug trade and the Government . Since 2002, when President Alavaro Uribe Velez was elected, there has been an ongoing peace process and the Government now has a presence in all districts. Earlier this year he won the election very convincingly once again and the economy is continuing to improve thanks to austere government budgets, focused efforts to reduce public debt levels, an export-oriented growth strategy, and the improved security situation in the country ... more ..

http://www.minesite.com/storyFull5.php?storySeq=3767

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Potential for cheap Colombian gold
By: Rhona O'Connell
Posted: '03-MAY-06 15:00' GMT © Mineweb 1997-2004

Greystar Resources has a multi-million ounce gold and silver resource at the Angostura property in north-eastern Colombia.

The company trades on the TSX and on AIM (ticker symbol GSL, market capitalisation £216 million or US$398 million), and recent drill results suggest that it will soon be able to announce a sizeable increase in the resource, which in August 2005 stood at 5.83 million ounces of gold indicated plus a further 4.47 million ounces of gold inferred.

These resource estimates are prepared to NI 43-101 standards and come from 112,797 metres of drilling. The 2006 drilling campaign is an aggressive one, amounting to US$12 million with twelve drills on site and the company has C$33 million (US$30 million cash in hand). The results at the end of August showed a resource as follows:

Indicated; 148.1.million tonnes @1.22 grammes/tonne gold and 5.17 g/t silver
Inferred: 123.3 million tonnes @ 1.13 g/t gold and 5.42 g/t silver, giving an indicated silver credit of 24.6 million ounces and an inferred silver credit of 21.5 million ounces. Over 30% of the gold is constrained in the higher-grade shoots.

Greystar has a 100% holding in Angostura, which lies in the mountains of the north-eastern Cordillera, approximately 300 kilometres north-north-east of capital Santa Fé de Bogotá and is served by good infrastructure and an educated workforce (literacy rates exceed 90%). The company has been in the area for ten years, but rejuvenated the operation when the gold market started to revive. The company describes Colombia as one of the most prospective in Latin America as well as being one of the most under-explored and now has a modern, favourable, Mining Act in place.

The project includes thirteen 30-year renewable concessions although these are being consolidated into just three, is 35 kilometres from Bucaramanga, which is the capital city of the department of Santander and operates off local hydroelectric power. Total land holdings amount to 6,670 hectares and believes that the project has excellent exploration potential within the confines of the unknown deposits and in the adjacent areas. The deposit is part of a very large system that is potentially suitable for a long life, supporting a low-cost bulk tonnage operation and the mining towns of Vetas and California are nearby. The terrain is steep but not severe, although the road access needs to be improved.

The deposits lie at an altitude of between 2,600 and 4,300 metres and have over 145 vein-like tabular structures in width of five to more than 50 metres, and averaging nine metres. Strike lengths extend from less than 100 metres to over 1,000 metres within an area that extends two kilometres from north to south and 1.5 km east-to-west. The latest results show that the deposit extends to the east although it does look as if the company is now finding the northern limit and some topographical constraints to the south. The latest campaign is drilling underground, splaying three to four holes per station and a sample tower was recently completed.

The latest drill returns show that step-out drilling to the east has returned 19.39 grammes of gold per tonne over five metres and 30.8 g/t of gold over 1.6 metres, while underground drilling has encountered 28.25 metres grading 7.24 grammes per tonne. The assays from 20 new holes include two holes drilled 50 metres to the east of the previous holes in the Veta de Barro area, one of which intersected seven structures, several of which penetrated higher-grade shoots within broader zones of lower-grade mineralisation. Drilling on the eastern extension of the same area has returned a number of intersections that have further expanded the wide mineralisation hit by drilling in the first part of this year, with intersections including 1.02 g/t gold over 31 metres (from 66 m to 97 m) , 2.71 g/t over 5.7 metres (f

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I'm no professional LH, just a PI who got interested in gold years ago and kept the faith. The last year or so has been great...for the feeling of vindication as well as the effect on my portfolio!

Having said that, I have picked my fair share of duds as well as gems like GSL. You'll have gathered that I take a "scattergun" approach, investing in many companies in the hope of catching the good ones. What's interesting now is that even the duffers are doing well.

Going back to GSL, the lack of interest in this company has baffled me but it's good to see a few others on this BB at least. As you say, it just gets better & better. The political risk used to worry me but, as mentioned in the Minesite article even this seems to be easing.

Still holding MCR. As for GEX, I used to hold but stupidly sold out too early; as you say the grades they are announcing these days are pretty exciting. I can console myself today with big gains in ORM and KGI so I'm not complaining.

Regards

Stentor

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May 02, 2006

Greystar’s Angostura Is As Good An Exploration Project As You’ll Find On The AIM Market

By Jack Hammer

The latest buzz around AIM and Canadian listed Greystar Resources’ Angostura gold-silver project in Columbia relates to the extent of the oxide cap towards the top of the vein system there. “We could wind up with a three to seven year oxide mine,” says Greystar president David Rovig.

A new resource estimate is due out within the next few weeks, based on 40,000metres of drilling completed since the last numbers came out in August. Back then Angostura showed just over 148million tonnes of ore grading 1.22 g/t gold and 5.17 g/t silver to give 5.8 million ounces gold in the indicated category, with an additional 123 million tonnes giving an inferred resource of 4.5 million ounces of gold at similar grades. Of that only 33.4 million tonnes of the indicated resource and only 14.6 million tonnes of the inferred resource was in oxides, with the remainder in the sulphides.

Although the new numbers only add more resource ounces at the inferred and indicated level, City brokers nonetheless expect the overall resource at Angostura to go to over 13 million ounces this time round. In any event Greystar’s view that the oxides could support three to seven year’s mining at between 350,000 and 500,000 ounces per year looks likely to be confirmed. Angostura lies beneath a sizeable hill so, scooping the oxides straight off the hillside should make for a relatively cheap operation, building the company up a nice record of cash flow before it starts to head in towards the more metallurgically complex sulphides.

With 12 rigs currently running Angostura could yet get even bigger too. To date Greystar has spent US$43 million and drilled 154,000 metres on Angostura, equating to a finding cost of US$4 per ounce. It has yet to disappoint. The company has drilled off one edge beyond the north east of what it calls the Cristo Rey anomaly area, but there are still plenty of other prospective areas going deeper into the hill - the current focus is immediately to the south of Cristo Rey. That such extensive drilling is required on a structure like Angostura - which contains over 80 veins - is a result of the checks and balances of the modern market. There are only two approaches to such a property – drill it like a swiss cheese or not drill it at all and mine without drilling. In difference circumstances both could make sense economically, but if bank finance is required the latter approach is not a viable option. For smaller operations that don’t require bank finance, like Cambridge Mineral Resources’ two Colombian projects, not drilling can work.

Angostura is big, though - many of Greystar’s backers in London feel that it has the potential eventually to show over 20 million ounces. So as a mark of its potential size it has to be drilled, although as of last August industry consultants Snowden were emphatic in cautioning that it remains an exploration rather than a development project. We’ll know fairly soon whether or not things are going to move on. Hatch will commence a feasibility study later in the year. A scoping study is already underway, but won’t be completed until the new resource numbers are available. Plenty of work remains to be done on processing too.

As it stands, however, Angostura is as good an exploration project as you’ll find on the AIM market. Mr Rovig himself has long recognised that the only reason Greystar was able to lay its hands on a project of such magnitude was that Colombia carried too great a political risk for any of the majors to touch. How times change. Selling Colombia has been getting easier for some time, Mr Rovig says, as the incumbent regime makes serious inroads into sorting out the economy and the country’s notorious drug cartels. It ought to get re-elected too. The irony is that as the rest of South America takes a lurch to the left and Colombia’s drug problems get shunte

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This just seems to get bigger and bigger........

Stentor, I've noticed that where good mining stock is, so are you! Do you have professional knowledge or are you a well informed PI?

I think I've missed the boat on this stock as I just didn't have the resources to invest back in '04. It seems almost churlish to think that a stock could easily double in the next year but that that's not enough but that seems to be the atmosphere in mining stock at the moment! So I'm looking for the next Greystar, which brings me on to my 2 current projects and 'd be interested in your thoughts, if you have any, on Mercator and Glencar mining. I think I've seen you on the former's BB. As for Glencar, with Geystar happy at gold in the 2, 3 and 4 g/tonne range, what to make of Glencar's 30, 50+ g/tonne findings at Komana?

Exciting times for the PI in small mining stock at the moment!

LH

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Thanks. I've been away on holiday for ten days, and all seems OK on return. That piece is certainly re-assuring. It seems that they are above a certain size and with a scope of operations that even a setback/delay here or there won't have any significant long term impact. Already in profit and I think it will be 600 rather than 500 in next few months. Cheers

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Hi Finchy,

I hope this ResourceInvestor article provides some reassurance.

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Shooting Greystar Shows No Sign of Falling

By Stephen Clayson
12 Apr 2006 at 01:40 PM EDT

LONDON (ResourceInvestor.com) -- On Monday, Greystar Resources [AIM:GSL; TSX:GSL] CEO David Rovig put his case to investors at the European Investor Metals & Mining Forum here in London. However, it is hardly imperative that he drum up extra support for the company’s shares, as they have put in a stellar performance of late.

Since Greystar was last profiled by Resource Investor and readers were reminded of the company’s potential, its shares have climbed from the 300-400 pence range to well and truly clear 500 pence and bring 600 pence within sight.

Naturally, Greystar shares have benefited from the excellent run in the gold price, but their advance has also been underpinned by the progress that the company has made with its Angostura gold project in Colombia and by the market’s gradually improving political risk perception of Colombia itself.

There is to be no let up in the pace of project development. A new resource estimate is expected by Rovig to be ready by middle of next month, and a scoping study is well underway. This study is targeted for completion sometime in July, and should be a precursor to a full feasibility study beginning later in the year.

What can investors expect from the updated resource estimate? A material increase is likely, as there are now 12 rigs turning on the Angostura site, drilling a mix of step out and infill holes. Some holes can be both; those that are drilled at a suitable angle intersect along their trajectory both known veins and new ones.

The current resource estimate for the Angostura deposit is 5.8 million ounces in the indicated category and 4.5 million ounces in the inferred. Given that this was based on around 112,000 metres of drilling, and that data from close to 40,000 metres of additional drilling will be incorporated in the new estimate, then an approximately proportional increase might not be unreasonable to anticipate.

This would put the updated resource at 7.8 million ounces indicated plus 5.6 million ounces inferred, an increase that would be unlikely to displease the market. In reality, a slightly less than proportional increase is likely, for no other reason than some of the drilling that has been undertaken will increase the reliability of the resource rather than its size.

Moreover though, there should be more to come, as drilling of Angostura is still ongoing and will likely be sufficient to support a further resource increase in due course. Drilling of peripheral areas may also raise the proportion of oxides in the resource, which is desirable as oxides are cheaper and easier to process than sulphides.

Usefully, Greystar is confident that the average grade of deposit will increase both with the immediately upcoming resource update and the one after that, as the nature of mineralisation at Angostura is such that denser drilling tends to identify high-grade vein intersections.

According to Rovig, the scoping study is being based on an operation producing 300,000-500,000 ounces per annum, processing roughly 40,000 tonnes of ore per day. This makes Angostura a sizable project and one that might one day attract the attention of a major, particularly if the resource keeps on getting bigger.

Comfortingly for investors, Rovig also reports that community relations and environmental considerations in the Angostura area have not yet presented any consequential issues. This will be a particular relief for anyone still a bit jittery about Colombia.

Investment Outlook

The shareholders of any company with a gold project of this size stand, as has been demonstrated over the last half year or so, to reap rewards from further rises in the gold price, and these seem likely.

But in addition, continued resource increases, complet

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Many thanks; I did a bit of reading - right, they are surprisingly big/active - did some thinking, and bought some. I pondered your point about below £5 but, as is often the way, my gut feeling was 'go for it' and today's rise has covered my entry costs and a little more. I like shares with this profile, and have quite a few SVS and CHTR; not quite so dramatic as GSL but nonetheless, very pleasing performers consistently over time. Not quite so wearing as EME/VOG etc although I'm holding on tight to some KMR
Onwards and (hopefully) upwards
will post again if GSL drop to £5 or when they pass £6

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Welcome Finchy! Good question, GSL have done brilliantly for me but they have had a strong run lately, mostly due to the gold price as far as I can see. It's not the kind of share that provides nice buying opps as the news has always been good - Angostura just keeps getting better & better!

To find out more, the website has nice pics and charts showing the drilling progress. It's a massive project.

It may never happen but I would wait for a sub-£5 price before buying. Either a dip in the gold price or (more seriously) political unrest might cause this - no sign of the latter yet thankfully, in contrast to Peru for example.

Good luck anyway.

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