Shiny Spotlight on 4 Small-Cap Gold Players

  • July 17, 2020 02:34 PM AEST
  • Team Kalkine
Shiny Spotlight on 4 Small-Cap Gold Players


  • Adding small-cap stocks to the portfolio is not always about risk, but at times they enhance one’s investment portfolio with their potential upside like growth opportunities.
  • Calidus Resources has received firm commitments for a share placement of AUD 25 million, with funds planned to aid a dual strategy of commencement of works at the Warrawoona Gold Project.
  • Alkane Resources’ shareholders have approved demerger of Australian Strategic Materials Limited, with the Company expecting to emerge as a simplified Australian gold sector player.
  • Kalamazoo has secured exploration tenure on the eastern border of Castlemaine Gold Project.
  • E2 Metals has implemented a share sale facility of ordinary shares and increased the size of SPP due to oversubscription.

Small-cap companies have a low market capitalisation, and the share price of these companies can experience extreme fluctuations over a small period. These stocks offer greater risk and volatility when compared with blue-chip stocks, but at the same time, they can enhance an investor's portfolio, owing to their potential upside like growth opportunities. Also, due to their higher market sensitivity, they can be a lucrative prospect amid a historically low-interest rate regime

Let's discuss some ASX-listed small-cap gold players, also known as junior miners.

Calidus Resources Limited (ASX: CAI)

Gold development company, Calidus controls the Warrawoona Gold Project in Western Australia that hosts a total Mineral Resource of 1,495,000 ounces at 1.06 g/t Au defined over a continuous 5km of strike, remaining open in all directions.

On 17 July 2020, the Company announced to have received firm commitments for AUD 25 million before costs through a share placement. CAI plans to issue 49,019,608 shares at a price of AUD 0.51 to professional and sophisticated investors. The placement shares are expected to settle on 23 July 2020, with trading to commence on 24 July 2020.

Proceeds from the placement are planned to be used for funding a dual strategy of commencement of works at the project. The funds will be directed to start early works such as installation of access roads, communications, village, and water supply, in addition to perform front end engineering design (FEED) to enable the order of long lead items. Moreover, funds will be directed towards the expansion of ongoing exploration programme at Warrawoona and Otways (recently acquired project in Pilbara).

On 13 July, CAI announced that it is about to commence drilling at the Otways Gold-Copper project, with a multi-purpose drill rig to begin the initial reconnaissance drilling of two targets. Calidus' Managing Director Dave Reeves stated that at the Otways prospect, historic drilling and rock chips have identified both gold and copper anomalies that demand further testing.

Calidus has a market capitalisation of AUD 125.23 million, and its stock was trading upward by 2.632 per cent to AUD 0.585 on 17 July 2020 (AEST 12:11 PM).

Alkane Resources Ltd (ASX: ALK)

Projects of gold production company, Alkane are mostly in the Central West region of NSW but via investments in other gold exploration and mining firms spread across the country.

On 16 July, the Company announced that its shareholders overwhelmingly approved the demerger of Australian Strategic Materials Limited (ASM).

Moreover, on the same day, the Company announced additional significant results from Infill Roswell and San Antonio resource drilling. Drilling program at Roswell is nearing completion, and an updated resource calculation is anticipated to be released along with preliminary mine plans for both Roswell and San Antonio in the last quarter of 2020.

Alkane has also released its quarterly activities report to 30 June, reporting gold production on the forecast at 13,358 ounces, with site operating cash costs at AUD 981 per ounce and AISC of AUD 1,368 per ounce. Sales of 12,992 ounces of gold for revenue of AUD 30.2 million at an average price of AUD2,327 per ounce.

Infill drilling within the Roswell and San Antonio Inferred Resources south of TGO advanced and several thick, high-grade gold intercepts were recorded.

Assay results of the final diamond core drill hole of the first Boda program indicated a +0.2g/t AuEq* sub-vertical zone of significant gold-copper mineralisation; approximately 500 metres north-south strike length, 400 metres wide and >1100 metres vertically.

Guidance for FY2021 is 45,000 to 50,000 oz at an AISC of AUD 1,450 to AUD 1,600 per ounce.

On 17 July 2020 (AEST 01:15 PM), ALK was trading at AUD 1.215, up by 2.532 per cent. The Company has a market cap of AUD 687.34 million.

Kalamazoo Resources Limited (ASX:KZR)

Kalamazoo has a market cap of AUD 93.85 million and its stock was trading downward by 0.694 per cent to AUD 0.715 on 17 July 2020 (AEST 01:16 PM). The Company has been granted Exploration Licence EL007112 near its Castlemaine Gold Project in the Bendigo Zone of Central Victoria.

Kalamazoo considers that the Queens project area, which spans the highly prospective Taradale Fault, is under-explored. Moreover, Queens immediately surrounds GBM Resources’ Malmsbury Gold Project.

Castlemaine Gold Project now has three tenures, EL006679 (Wattle Gully, ~70km2), EL006752 (Wattle Gully South, 218km2) and EL007112 (Queens, ~22km2). Due to the significant potential of the project, Novo Resources Corp and Canadian investor Eric Sprott made a strategic investment in the Company in January 2020.

According to Kalamazoo's Chairman and CEO, Luke Reinehr, the increase of valuable exploration tenure on the eastern border of the project is an important milestone for the Company and shareholders.

E2 Metals Limited (ASX:E2M)

E2M is an Australian exploration company, which focuses on discovering gold and silver in the world-class Santa Cruz province, southern Argentina. On 17 July 2020, the Company released an announcement concerning the implementation of a share sale facility of ordinary shares (fully paid) for shareholders who hold less than a marketable parcel of shares being any shareholding valued at less than $500.

In early July 2020, the Company announced a market update regarding heavy oversubscription of its share purchase plan (SPP). It received applications of AUD 2,166,300 (before costs).

The Company decided to increase the size of SPP to accept all applications to raise AUD 2.17 million and issue 17,330,400 fully paid ordinary shares at AUD 0.125 per new shares to the shareholders who participated in the SPP.

The funds raised would be directed towards accelerating the emerging greenfields Conserrat gold and silver discovery. According to Managing Director Todd Williams, the heavily oversubscribed participation by the existing shareholders placed the Company in a strong position for the future.

Also read: E2M Raises $2.75 million by Placement to Strengthen Balance Sheet and Fast-track Conserrat Project

The Company has a market cap of AUD 20.99 million and its stock on 17 July 2020 (AEST 01:47 PM), was trading upward by 6.25 per cent to AUD 0.170.


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