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Summary
- With Gold trading around A$2000 an ounce, gold stocks with strong fundamentals are benefiting the most from the rally
- Auteco Minerals is offering a four-digit 1-year return with acquisition of Pickle crow, drilling and maiden resource definition backing the success
- De Grey mining has made significant exploration progress with multiple drilling programs
The Gold price rally has pushed the prices of the yellow metal to record levels. Demand for the gold-backed Exchange traded funds and the central bank buying has boosted the gold prices which are at present trading almost at ~ A$2,000 an ounce of Gold.
The gold explorer and miners are also benefitting from the high commodity price. They are exhibiting strong operational performance, stemming from large and sustained gold volumes, and easy access to investment capital, excellent exploration results and the high gold prices, which is maximising their margins.
On that note, let us discuss two gold stocks listed on the Australian stock exchange-
Auteco Minerals Ltd (ASX:AUT)
Auteco Minerals, an emerging gold and metals explorer, is focused on advancing high-grade gold resources on the Pickle Crow gold project in Canada and the Limestone Well Vanadium -Titanium Project in Western Australia.
Source: ASX update and Kalkine
As on 25 August 2020, Auteco has given a four-digit return of ~3800% and ~2066.67% on the past one year and YTD basis respectively. The surge in the stock price is based on the company’s fundamentals and performance during the year.
Auteco, which was trading around A$0.005 a year ago, closed the trading session on 25 August 2020 at A$0.195. Major developments backed the rise in the stock prices during the past year:-
- Strong cash position
- Acquisition of the Pickle Crow gold project in Canada and announcing a resource estimation of 830,000oz of Gold at 11.6 g/t
- Commencement of drilling program at the Limestone Well Vanadium-Titanium Project
Capital raise from Share placement strengthening Cash Position
The company recorded cash and equivalent of AA$4.847 million as on 30 June 2020. However, in a more recent report, the company highlighted AA$33 million cash as on 16 July 2020 backed by a A$30.4 million through a share placement in July 2020. Proceeds will be used for funding the ongoing exploration work at the Pickle Crow Gold Project and supporting working capital requirements.
Acquisition of Pickle Crow gold project with a maiden JORC 2012 inferred resource of 830 kilo ounce
On 28 January 2020, Auteco announced entering into a binding agreement for the acquisition of 80% stake in the Pickle Crow high-grade gold project in Canada. Pickle Crow is located in the prolific mining district with historical gold mines producing over 1.5 Moz at 16 g/t gold.
An Initial 5,000 metres drilling program was commenced on the project area targeting the high-grade, near-surface gold targets. The drilling program completed a diamond drilling program at nine holes to grow more resources and test the multiple walk-up targets further.
Further in June, the company revealed a maiden JORC 2012 inferred resource of 830 kilo ounce at a grade of 11.6 grams per tonne.
Limestone Well Vanadium-Titanium Project
Auteco has a joint venture agreement with Mithril Resources Limited to earn up to 80% at the exploration licences 20/846 and 51/1069. On 9 August 2019, the drilling program at the Limestone Well vanadium target commenced which identified a major vanadium-titanium target along the strike of the Vanadium deposit.
The samples from the 900 metres RC drilling program were assayed. Here are the outcomes of a few intercepts-
- 20 metres with 0.48% V2O5 & 6.5% TiO2 from 12m and a second zone of 72m with 0.46% V2O5 & 8.6% TiO2 from 52 metres (including: 16m with 0.70% V2O5)
- 12m with 0.72% V2O5 & 8.5% TiO2 from 12m a second zone of 24m with 0.50% V2O5 & 6.2% TiO2 from 48m and a third zone to end of hole of 56m with 0.46% V2O5 & 6.1% TiO2 from 164m
- 20m with 0.50% V2O5 & 6.5% TiO2 from 64m and a second zone of 116m with 0.36% V2O5 & 11.0% TiO2 from 104m to end of hole.
De Grey Mining Limited (ASX: DEG),
De Grey Mining, the Subiaco based gold miner, is involved in the exploration of base and precious metals. De Grey mining advances on the wholly-owned Pilbara Gold Project with a mineral resource of over 1.7 million ounces of gold and stretches over 1,500 square kilometres of area.
Pilbara Gold Project Source: De Grey Mining
As on 25 August 2020, De Grey mining closed at A$0.885 a share. The stock prices of De Grey mining offer a return 1601.92% on year to date basis, and 1452.63% in the past 1-year timeframe, making the stock one of the growth stocks backed by fundamentals.
During the year, consequent to the extensive drilling program substantial mineralisation was discovered at Buckle and Hemi deposits. The RC drilling activity focuses on the sulphide mineralisation along the strike with a width of up to 200 metres of the Sulphide zones at 30,560E and 30,720E at the Hemi deposit.
Source: ASX
As a consequence of the RC and diamond drilling program, the following outcomes were observed-
- 2 Parallel prospective gold zones identified - Aquila and Brolga
- Strong gold mineralisation associated with massive sulphide alterations
- Sulphide alterations with a width of over 200m wide at the Brolga Zone
- Strike lengths exceeding 750 metres with widths up to 50 metres along the Aquila Zone
- Multiple prospective zones
Following the extensive exploration programs, the mineral resource was upgraded to 37.44Mt with a grade of 1.8 g/t Gold.
In April, the company secured an A$31.2 million for a share placement to fund the ongoing exploration activities of the Hemi Project. In August, the company announced promising drilling results from the Aquila and Crow Zones at the Hemi Gold Discovery in Western Australia.
