Resources Top 5: ASX bargain hunters are buying the gold dip

Investors run for gold as the threat of a recession starts to settle
Goldies OXX, AGD and GSM up
AVM and GRX also up

Here are the biggest small cap resources winners in early trade, Tuesday July 19.

Investors seem to be running for gold as the threat of a recession starts to settle despite gold prices sliding down to the US$1,700/oz mark following five straight weeks of loses.

The likely trigger for gold’s current weakness is the release of the US inflation report, which revealed annual price pressures rising 9.1% in June and led to the repricing of rate hike expectations for July.

Gainesville Coins precious metals expert Everett Millman told Kitco the last time gold traded below the US$1,700 mark was just before the pandemic hit and now it is in danger of the negative feedback loop taking prices there once again.

“As market expectation and narrative is repriced for stronger dollar this summer, this will affect the technical outlook,” he says.

“The negative feedback loop is when prices fall, more technical traders will be updating the ranges and getting less bullish on gold,” he told Kitco News.

OCTANEX (ASX:OXX)

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Shares in Octanex soared 58%, an intriguing amount given that the last activity from the company was the resignation of a director back in April and there’s no word of any capital raising despite having a paltry cash balance of just $52,000 at the end of the March quarter.

At the end of April, OXX announced wide-spaced reconnaissance sampling had wrapped up at the flagship Sefton Project in Western Australia’s eastern Goldfields – a region well known for its gold endowment.

Gold discoveries such as AngloGold Ashanti’s (ASX:AGG) Sunrise Dam mine and Gold Field’s (JSE: GFI) Granny Smith mine occur in the adjacent NNE-SSW trending greenstone belts to the west of Octanex’s Projects.

Low-level gold anomalism has been identified with highest individual assay results of 5ppb gold along, or proximal to, regional magnetic and/or gravity lineaments traversing the Sefton Project.

This ~$5.9m market cap company had $52,000 at the end of the quarter.

AUSTRAL GOLD (ASX:AGD)

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This gold and silver focused explorer has projects in Chile, Argentina, and the US with its flagship mine being the Guanaco/Amancaya project in Chile.

The company’s strategy is focused on expanding the life of its cash-generating assets in Chile, restarting its Casposo mine in Argentina and building a portfolio of quality assets.

Back in March, AGD updated its proven and probable mineral reserves for the Guanaco-Amancaya operation, which now sit at 12.1Mt grading 0.84g/t gold and 4.89g/t silver containing 0.326 million ounces gold and 1.91M oz silver.

Measured and indicated mineral resources for the Guanaco-Amancaya Operation are estimated to be 14.9 million tonnes grading 1.03g/t gold and 5.89g/t silver while inferred resources are roughly 2.4 Mt grading 1.18g/t gold and 3.93g/t silver.

AGD CEO Stabro Kasaneva says the company is excited at the prospect of continuing to increase shareholder value by extending the mine life of Guanaco-Amancaya.

“Opportunities for higher-grade ore sources from exploration or acquisition could be easily integrated into the Life of Mine plan, and would benefit from lower unit costs,” he explains.

GOLDEN STATE MINING (ASX:GSM)

Drilling has kicked off across GSM’s Yule Project in the Western Australia’s Pilbara region targeting lithium and gold targets.

The 1,500m 10-hole program will test a shallow sand-covered, complex greenstone-granitoid structural setting and coincident, elevated to anomalous LCT pathfinder and gold air-core (AC) intersections recorded in 2021 reconnaissance drilling

GSM’s managing director Michael Moore says investors can look forward to targeted field exploration over the second half of 2022 as it progresses activity on a number of self-generated projects.

ADVANCE METALS (ASX:AVM)

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AVM is focused on brownfield projects in North America.

Its strategy is to develop a portfolio of projects that support the green economy through the discovery and delivery of commodities that promote electrification and decarbonisation.

AVM expanded its Anderson Creek Gold Project in Idaho +200% earlier this week by securing an additional 38 federal mining claims – this means its footprint totals 947ha.

The new areas contain similar geological features to the current area with the advantage of having remained largely under-explored, but it is believed that the addition of the new claims will allow it to prove up the potential for a deposit.

“The teams on the ground will be mapping and taking samples in the newly claimed areas so we can commence the drilling permitting process,” AVM chairman Geoff Hill said.

GREENX METALS (ASX:GRX)

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The explorer formerly known as Prairie Mining did a full 180-degree swivel by dumping fossil fuels in favour of sexier, ‘new age’ metals like copper, nickel and PGMs.

Its main game is some newly acquired ground in Greenland called ‘Arctic Rift’, where historical exploration results show its potential to “host world-class copper deposits”.

GRX can earn 80% of the project by spending $10 million by October 2026.

Greenland is increasingly recognised as one of exploration’s final frontiers, as melting ice caps reveal more ground. All the big boys want a slice, GRX says.

The ~$55m market cap had 5.67m cash in the bank at the end of the March quarter.