Gold Digger: A weekly recap of the news driving ASX small cap gold stocks
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The deadly coronavirus epidemic continues its spread outside China, prompting panicked investors to pour into gold once again.
The safe haven investment is currently at $US1661.20/oz ($2500 Australian) — its highest point since February 2013.
“While there were signs in early 2020 that the worst was over for world trade and manufacturing, that optimism has been dashed by the outbreak,” reports Oxford Economics.
“In China (the world’s second largest economy), we expect the near-term impact to see Q1 growth plunge to just 3.8 per cent year-on-year.”
Here’s how ASX gold stocks performed for the period Feb 18 — Feb 24 [intraday]:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:
Market Cap: $13.5m
Norwest’s very first reverse circulation drilling campaign at the new (for them) Bulgera project returned grades up to 29.3 grams per tonne (g/t) below and along strike of the old open pits – which indicates that historic mining barely scratched the surface.
Drilling intersected gold in 42 of the 46 holes drilled down-dip of the Bulgera and Mercuri pits. All were within 120m of surface, the company says.
Norwest is now planning a follow-up drill program to chase this gold even deeper and further along strike.
GULLEWA (ASX:GUL) +42%
Market Cap: $6.2m
Gullewa is a super low-profile exploration company which holds shares in other gold explorers. Importantly, Gullewa also has a 1 per cent royalty on a WA gold mine called Deflector, owned by Silver Lake Resources (ASX:SLR).
In FY19, Gullewa received a handy ~$1.67m in royalty payments from Deflector production.
Last week, Gullewa caught a rocket, probably because Silver Lake had just announced some spectacular drilling results next to the existing mine (like 1.9m grading 179g/t gold and 1.4 per cent copper).
This “has the potential to deliver near-term mineral resource growth,” says Silver Lake.
The miner also says that Deflector land package also contains “multiple known gold occurrences and historical mines within a 5km radius of the Deflector plant … and following the completion of the plant upgrade will be introduced to Silver Lake’s exploration programs”.
The ~80,000oz producer’s share price, which plummeted from +70c during operational ramp up to its current 1.3c, tells the tale.
But not only is the current high gold price giving it some breathing space (finally), Blackham has hit high grades like 26m grading 15.69g/t during expansionary drilling.
It’s all part of Blackham’s stage-one expansion project, which will hopefully see underground production ramp up through 100,000oz to 120,000oz per annum starting from 2021. Timing isn’t everything; but it can be pretty damn important.