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Summary
- The shares of the company have shown a volatile trend and have fallen in the last session in response to the correction in international gold prices.
- The company has recently announced the commencement of drilling operations in Moydow in Nigeria.
- The mining assets of Panthera Resources hold a very high value creation potential.
Most of the gold exploration and production stocks listed on the London Stock Exchange have registered a fall in their prices over the past couple of weeks because of the fall in the price of physical gold. This fall in stock prices got magnified as many investors had taken positions in these stocks just prior to the imposition of the second lockdown, as they were expecting a sharp rise in the gold prices.
However, the prices continued to correct, forcing investors to sell out their positions in gold stocks. Panthera Resources Plc shares suffered a sharp plunge of 6.88 per cent on 1 December, closing at GBX 14.90.
Share price chart for last one month
(Source- EODHD/Others Thomson Reuters)
Positive news catalyst
In the recent past, Panthera Resources has come up with many updates on its mining resources which have been a positive catalyst for its stock price movement. In its most recent update, it has provided information on its Dagma Project, located in central Nigeria where prospecting work is currently being carried out by its associate company Moydow Holdings Limited.
Results from the preliminary eight-hole shallow drilling programme conducted at the Dagma project have established the presence of several sub-parallel zones of gold in quartz veining identified by artisanal miners in that area. Some of the best results are:
- 24 metres @ 0.65g/t Au from 9 metres including 6m @ 1.14g/t Au from 18 metres and 3 metres @ 1.55g/t Au from 30 metres
- 9 metres @ 1.13g/t Au from 39 metres including 3 metres @ 2.54g/t Au from 39 metres; followed by 3 metres @ 8.56g/t Au from 57 metres
- 6 metres @ 0.61g/t Au from 9 metres; followed by 3 metres @ 0.51g/t Au from 21 metres
- 8 metres @ 0.27g/t Au from 21 metres
Moydow’ s Nigerian projects are located within the Benin-Nigerian Shield (BNS) comprising Archaean and Proterozoic basement rocks. It currently holds two main projects, both hosted within schist belts in the BNS. Till date, Moydow has focused on the northern block (Dagma) and has conducted geological mapping, soil sampling, trenching, and drilling.
Recovery ahead
The value of gold as a long-term investable asset remains unhindered with the situation on the pandemic front is expected to remain volatile until the end of 2021. Most industries during this period will be in their recovery phase.
The mining assets of Panthera Resources hold a very high value creation potential. Many of these assets have more potential than what has been discovered so far. The company has a strong balance sheet and a robust cash position to run its operating activities smoothly.
