While gold companies have performed remarkably well in the past six months, there are a couple of outliers. Pic: Getty Images
These gold plays stumbled in the last six months
Mining
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Gold plays have performed remarkably well in the past six months thanks in no small part to the stellar performance of the precious metal, which has risen nearly 11 per cent to $US1905 ($2691) per oz.
However, as with anything there are always a couple of outliers and Stockhead has identified a number of companies that have simply not kept up with the rest of their counterparts.
It is not all doom and gloom though, as some of these gold plays may have just run afoul of over enthusiastic investors.
Here are the gold plays that went against the positive trend in the market
| Code | Description | Last | MktCap | %SixMth |
|---|---|---|---|---|
| RML | Resolution Minerals | 0.043 | $12.3M | -57 |
| MAR | Malachite Resources | 0.051 | $6.5M | -49 |
| SKY | SKY Metals Ltd | 0.175 | $44.4M | -36 |
| NWM | Norwest Minerals | 0.105 | $7.8M | -36 |
| ONX | Orminexltd | 0.025 | $13.5M | -31 |
| VAN | Vango Mining Ltd | 0.1 | $98.4M | -29 |
| HXG | Hexagon Energy | 0.044 | $12.0M | -25 |
| ANL | Amani Gold Ltd | 0.0015 | $15.7M | -25 |
| ARN | Aldoro Resources | 0.094 | $6.4M | -25 |
| GMN | Gold Mountain Ltd | 0.041 | $28.3M | -18 |
| GOR | Gold Road Res Ltd | 1.5 | $1.3B | -14 |
| SAU | Southern Gold | 0.12 | $19.2M | -11 |
| DCN | Dacian Gold Ltd | 0.395 | $211.5M | -1 |
NSW gold drilling
Sky Metals (ASX:SKY) had a good start to 2020 with the company reporting in February that maiden drilling at its Cullarin project in central New South Wales had intersected a high-grade intersection of 14m at 20.2g/t gold from 92m within a broader zone of 93m at 4.24g/t.
This sparked significant growth in the company’s shares that reached a peak in mid-May.
However, subsequent results failed to capture investor interest and shares in the company dropped 36 per cent over the last six months.
More recently, re-sampling of historical drill holes has confirmed the high-grade potential of the Hume target.
Sky has also started diamond core drilling of Hume and will resume reverse circulation drilling at Hume North once ground conditions improve.
The company has also flagged that it will carry out an ‘aggressive’ exploration program over a series of high potential targets along the 20km strike of the Cullarin gold prospective corridor.
Production suspended
Meanwhile, Orminex (ASX:ONX) has seen some ups and downs in the past six months with shares hitting a high of 7.4c in late April before release a processing and mining development update for its Comet Vale project that failed to resonate with investors.
Like most other gold plays, the next peak in early August was spurred by the announcement that a significant improvement in gold production had placed contract miner Mineral Ventures in position to make working capital repayment for that month.
However, shares dropped in early September after diamond drilling to confirm the continuity of mineralised shoot indicated that while a mineralised structure was present, the widths were not amendable to mining.
As a result, Mineral Ventures opted to suspend mining operations at Comet Vale while the two companies complete a full review of operations and work to understand its controls on mineralisation.
Alaskan gold exploration
Shares in Resolution Mining (ASX:RML) dropped in the past six months thanks in part to drilling at its 64North gold project in Alaska’s Tintina gold province returning results that were below expectations.
Assays from three recently completed drill holes on the Echo, Reflection and Aurora prospects returned no significant gold intersections.
To be fair, the six-month window also coincides with a spike in the company’s shares in April – as evidenced by an ASX price and volume query that month, a common occurrence for gold plays after interesting news is released.
The news in question was an operations update which noted that initial visual observations and logging of drill core at 64North had confirmed the presence of a Pogo-style mineral system.
Despite the disappointing results from the three drill holes, the company remains confident that it is on to something major.
Managing director Duncan Chessell noted in September that quartz vein hosted gold systems like the Pogo mine and Northern Star’s (ASX:NST) nearby Goodpaster prospect can have large variations in grade and vein thickness within short distances.
The fact that Northern Star has set aside $21m for delineation drilling at Goodpaster clearly highlights the prospectivity of the region.
Resolution is also waiting on assay results from rock chip sampling to help prioritise drilling targets for the 2021 summer season.
