The potential for finding high-grade gold beneath old open pits and around old underground workings has become a popular thematic amongst ASX-listed junior explorers.

There are a couple of good reasons for that. First, there is the rise in the Australian dollar gold price to historically high levels of more than $1800 an oz. It means low tonnage but high-grade gold shows can have a meaningful impact on a small company’s fortunes.

Then there is the spectacular success Canada’s locally listed Kirkland Lake (ASX:KLA) has enjoyed at its Fosterville operation near Bendigo in Victoria.

It is where Kirkland followed gold first mined in open pit positions to greater depths, eventually hitting the fabulous Swan Zone in 2016 where reserves currently stand at 2.34 million oz grading 49.6 grams of gold a tonne.

The grade has made the previously clapped out Fosterville Australia’s cheapest producer of gold, with operating cash costs in 2019 forecast at $US170-$US190 an oz. Only two mines which come with a copper leg, Newcrest’s Cadia and Glencore/Evolution’s Ernest Henry, can manage lower gold production costs (after taking the copper as a credit).

The chances of a junior explorer stumbling on to another Swan Zone is extremely remote. But as long as local gold prices remain at these elevated levels, the incentive to find even a small but high gold deposit remains strong.

That is particularly so for explorers with tiny market values. Success in outlining a high-grade development opportunity can works wonders for the junior’s market value, albeit off a low base. That is the hope of shareholders in a little thing called Spectrum Metals (ASX: SPX) which last traded at 0.4c for a market value of $4 million.

Spectrum used to spend its time as a rare earths explorer. But in recognition of the growing investor interest in the gold price-Fosterville high-grade thematic, Spectrum ditched rare earths to focus on high-grade gold opportunities at known gold deposits.

Originally, it headed off to California with an option deal to acquire the historic and high-grade Washington underground mine. But the option was let lapse last year after the region’s devastating bushfire.

Now the focus is on Western Australia, with Spectrum acquiring the old First Hit gold mine, 50km west of Menzies.

First Hit was mined briefly in 2001/2002 when the gold price was struggling at less than $US300 an oz. It was mined to a depth of 225 metres, with the ore hauled to nearby treatment plants for toll processing.

Spectrum is banking on being able to find more high-grade material in and around the old mine. On that score, historic drilling at the base of the existing workings included hits of 1.92m grading 162g/t and 3m at 77/g/t gold.

But the immediate interest in the stock is its Penny West project, 25km south of the old Youanmi gold mine in WA. Penny West was picked up shortly after the acquisition of First Hit.

Spectrum kicked off a drilling program at Penny West last month aimed at finding extensions to the high-grade shoots below the known mineralisation, as well as testing the remaining potential of the northern end of the open cut.

Spectrum shareholders spent the weekend wondering if the drilling program has had some early success as the company went in to a trading halt pending on Friday pending an announcement early this week on “preliminary exploration results that the company believes are material to its activities.’’

On the assumption that the drilling to date has returned some high grade hits over reasonable widths, the impact on the 0.4c stock could be worth watching.