Small cap explorer Magnetic Resources has put its foot on a 2km gold target in Western Australia that it says is still going.

Magnetic (ASX:MAU) told investors on Monday that it uncovered a large mineralised zone just 10km from Dacian Gold’s (ASX:DCN) Jupiter mine and 15km from Gold Fields’ Granny Smith operations.

Over 80 per cent of the 24 holes drilled at the project called “Hawks Nest 9” have intersected gold and are still open to the east.

Magnetic said these hits are being followed up with another 2420m of drilling across 51 holes to extend the mineralised zone down to at least 120m to 150m and infill the gold-rich zones.

Managing director George Sakalidis said that with the Australian dollar gold price greater than $1800 an ounce, the Hawks Nest 9 project is “shaping up and has potential for a large-scale shallow deposit”.

Grades of the intersections range from 0.5 grams per tonne to over 3g/t.

While anything over 5g/t is generally considered high-grade, in Australia shallow grades of above 1.5g/t are considered good – especially at a price of more than $1800 an ounce.

Magnetic Resources (ASX:MAU) shares over the past year.
Magnetic Resources (ASX:MAU) shares over the past year.

The gold price started 2019 with a bang, peaking at $1851.78 an ounce on January 2 before slipping back. It is currently trading around $1816 an ounce.

There have been some pretty hefty deals done lately, such as gold mining’s biggest ever merger – the $US18 billion ($24.8 billion) tie-up between Barrick Gold and Randgold Resources – and the $US10 billion marriage between Newmont Mining and Goldcorp.

But for the first time in quite a while, cash is starting to flow down into the junior gold explorers.

Lion Selection Group director Hedley Widdup told Stockhead that gold has been a “standout”.

“When the gold price spiked, fairly large amounts of money were raised for junior companies in the market,” Mr Widdup noted.

“So this gold price tick up, as much as it might be driving behaviour in the majors to an extent, I think at the junior end that’s going to be an exciting thing for the next three months or so.

“It’s going to be the opportunity to raise money to explore, to develop or perhaps even to acquire.”