950% Land Increase Sends Hawkstone Minerals’ Share Price Skyward

950% Land Increase Sends Hawkstone Minerals’ Share Price Skyward

US-based mineral explorer Hawkstone Minerals Ltd [ASX:HWK] has watched its share price push higher for the third consecutive day, thanks to the acquisition of new land.

HWK has caused quite a bit of excitement among investors recently. The latest fanfare surrounds its acquisition of the King Solomon mine in Idaho.

Bigger always seems to be better when it comes to gold exploration — and that seems to go for the size of your land holdings, too, irrespective of how much gold is believed to be there.

The HWK share price is up 26% at time of writing to trade at 1.9 cents per share.

ASX HWK - Hawkstone Share Price Chart

Source: tradingview.com


Confidence the key for Hawkstone, not the investor

If you read The Daily Reckoning Australia regularly, you’ll remember Hawkstone and some recent gold explorer news.

For instance, in a discussion of the Metalicity Ltd [ASX:MCT] share price yesterday, I pointed out how expectation and perception caused the negative price action, despite seemingly good news.

This is not a novel observation.

How does this work in relation to Hawkstone?

Well, it is a similar phenomenon.

HWK has significantly increased its land holdings at the Western Desert Gold-Copper Project, located in Western Utah, by 950%.

That sounds great, but is it?

Let’s break it down.

Firstly, the company obviously believes there is economic potential in the area. Its holdings have increased from 2.67 square kilometres to 25.41 square kilometres.

Secondly, the project lies 50 kilometres east of the Newmont-owned Long Canyon Mine, which has 4.5 million ounces of gold.

Having neighbours with large resources is certainly a positive, as it means you’re more likely to at least be digging in the right area.

Thirdly, initial geological sampling has returned some positive high-grade results, which not only include gold but also silver, copper and lead.

This all sounds promising.

But is it a rational reaction?

At the beginning of trade this morning, shares were up 60% but have since slid.

Right now, we don’t know how much gold is under HWK’s new land or even if it will be economically viable.

Action too early

From the announcement this morning, it may be some time before we get a glimpse of what is under the surface.

Preliminary studies are still being done in order to identify suitable targets.

So, depending on what else is in the pipeline, the HWK share price could taper off in the meantime.

Kind regards,

Lachlann Tierney,

The Daily Reckoning Australia

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