Goldsource Mines rockets 28% on new Saskatchewan coal resource

Goldsource Mines shot up 28% today on news that it has increased indicated coal resources at its Border Coal Project by 48%.

The updated resource estimate, based on its 2011 drill program, shows indicated resources rising from 79 million to 117 million tonnes of coal, after the addition of a coal sub-basin. The project now exceeds the 100 million tonne threshhold that the Vancouver-based company (TSX-V:GXS) considers economical. Some of the deposits are up to 120m thick. The project is located about 40 kilometres north of Hudson Bay, Saskatchewan.

"We are pleased by the fact that the limited 2011 drill program successfully added more than 37 million tonnes of indicated resources to our total resource base, Goldsource President J. Scott Drever said in a statement. "This success supports our belief that there is still more coal to be identified within our property boundaries."

COO Eric Fier told Saskatchewan radio station New Talk 980 CJME "There’s not a lot of deposits that are bigger than that in Canada."

However, the relative low quality of the coal means the company is looking at a coal-to-liquids process or gasification as a way of processing it:

“Basically, you’re trying to reduce that piece of coal down to carbon and reduce the ash and your moisture,” he told CJME. “And then at the end of the day, you squeeze it and you get barrels of oil.”

Goldsource plans to do more drilling and bulk sampling this year, at an exploration budget of between $3-5 million. It has yet to produce a prefeasibility study.

Read the full news release