Outstanding interim gold results prompt analyst to recommend its new neighbour
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Special report: Intermin Resources has been having a field day at its Teal Gold Project on the outskirts of Kalgoorlie, unveiling a stream of strong results which are widely expected to see a significant increase in its 160,000 ounce resource.
Intermin’s (ASX:IRC) high-grade intersections are immediately next to land held by the ASX’s newest gold explorer First Au (ASX:FAU) which has just raised $6.2 million.
At First Au’s Gimlet project drilling has already established that a blanket of shallow “supergene” gold covers a huge area of 3.6km by 400m.
Importantly, this is a direct extension of the shallow mineralisation at Teal.
Even more importantly, Intermin’s drilling below this shallow blanket has hit rich gold — begging the question, will this success at depth be repeated on the other side of the fence?
This highly promising scenario is the key point in a new report published by equity research firm Beer & Co.
Its senior analyst Pieter Bruinstroop recommends investors buy First Au, saying “there are already enough indicators to suggest that Gimlet will be valuable”.
First Au’s recent raising was pitched at 4c a share compared with its current price of 3.3c, giving it a market capitalisation of about $9 million.
“First Au has the people and the assets to succeed and is priced to make it a buy,” Mr Bruinstroop said.
“Intermin has stated that they expect a revised mineral resource estimate in the September quarter and Beer & Co expects, given the quality of the drill results reported to date, that the revised mineral resource estimate will be much larger.”
Shallow gold at Gimlet was “thought to be sourced from nearby underlying” quartz lodes, Mr Bruinstroop said. The mineralisation is also on a structure parallel to that which hosts the gold on Intermin’s ground.
“Intermin’s deposits are located on a fault that extends into First Au’s Gimlet project to the north,” the report says.
“There is also a further structure that is likely to extend into Gimlet and for which Intermin has reported many high-grade intercepts and good width.
“First Au has a reasonable geological model to pursue, including deeper drilling to find higher-grade feeder zones for the supergene blankets as well as exploring along the fault lines hosting Intermin’s deposits.”
Drilling at Gimlet is set to start any day.
This special report is brought to you by First Au.
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