Coal results in for Goldsource property

In resources news Tuesday, Goldsource Mines (TSX: V.GXS, Stock Forum) reported that results for 213 coal samples from nine holes drilled last summer at the Durango Coal Seam at the Border Coal property in Saskatchewan confirm that the seam is a “good quality” thermal coal.

The results confirm that the Durango Coal Seam ranges from sub-bituminous C to bituminous C in rank, says Goldsource. The coal ranges in calorific value from 20,640 kj/kg (8,874 Btu/lb) to 23,358 kj/kg on a "dry" basis, and the seam has raw ash values ranging from 11.4% to 18.7% and moisture contents from 24.8% to 37.9% on an "as received basis".

"We are excited by the overall results of this summer's program in that they demonstrate we have a near-surface thermal coal deposit that currently averages about 20 metres in thickness with good calorific values, low ash content and low to moderate sulphur content,” said the company’s president J. Scott Drever.

“Preparations for the winter drill program are well advanced and will focus on potential resource definition in the discovery area and exploration of other potential basins within the overall permit area. The likely commencement date for the winter program is now dependent upon the receipt of approvals for the proposed exploration program from the Ministry of Environment of Saskatchewan, expected between mid-December and mid-January," he added.

Goldsource notes that the Free Swelling Index tests received to date, a possible indication of potential coking coal characteristics, did not produce any positive results. However, the company adds that potential still exists to find coal with coking characteristics, as only 11 holes have been drilled in the permit area, to date.

There was a flurry of activity on the Goldsource Mines Bullboard Tuesday morning following the news, with Stockhouse members weighing in on the results.

grover11 commented: “By way of comparison, the average calorific value of the Durango Coal Seam is generally higher than those of the Alberta thermal coal fields and the major producers of the Powder River basin. I am no coal expert but this looks to be a sweet find[sic].”

schottchris added: The BTU content is actually lower than the initial results, and the "low ash" coal is the deepest seam. The Alberta coals that they speak of and compare to, are NOT under 80 meters of overburden. Actually if you go to Wabush, the coal there, even after years of mining, is only a couple of meters below the surface. Assessment - This doesn't look economically mineable to me.....as I have always said. You guys who want to do some analysis on the economics of this this will need to look at wash costs as well[sic]”.

Shares of Goldsource Mines were up 4.5% in early trading Tuesday.