De Grey Mining Share Price Down as Hemi Growth Continues (ASX:DEG)

De Grey Mining Share Price Down as Hemi Growth Continues (ASX:DEG)

The De Grey Mining Ltd [ASX:DEG] share price has given back practically all the gains it made during the big gold rally last year.

With more results out from its Hemi Gold Discovery today, the DEG share price has fallen a further 4.2% or 3.5 cents to trade at 83.5 cents per share at time of writing.

ASX DEG Share Price Chart - De Grey Mining Shares

Source: Tradingview

REVEALED: What’s Next for Aussie Gold Stock Prices? Learn more.

The fall comes as gold fell steeply to trade below US$1,700 per ounce for the first time since June last year.

But this is what our resident gold expert predicted and she says it could have a ways to go before we begin to see a recovery.

In short, it’s her view that gold and ASX gold stocks are currently on sale — and I agree with her.

I won’t go into what the gold recovery will look like in this piece, but you can read up on it here and here.

‘Rapid’ growth continues

In my opinion, DEG has help set the bar for reporting activities to its shareholders.

Whether this help affected the share price in a positive way is debatable.

Nevertheless, the transparency has been admirable.

The reason I bring this up is because we cover DEG frequently here at The Daily Reckoning Australia.

And although DEG’s announcements usually appear positive, the share price doesn’t always respond positively.

As was the case last week.

This week the announcement tells a similar story, just at different mineralised zones.

The drilling update concerns the Diucon and Eagle discoveries, which are located immediately to the west of Crow.

The gold mineralisation shows similar alteration and sulphide development as seen at the adjacent Hemi deposits of Aquila, Brolga, Crow, and Falcon.

See below for reference.

De Grey Mining

Source: De Grey Mining

Diucon mineralisation confirmed more than 900m strike and to 200m depth and remains open, with highlights of:

  • 121m at 1.1 grams of gold per tonne (g/t) from 80m, including 17m at 3.5g/t from 141m
  • 36m at 2.0g/t from 224m, including 12m at 4.6g/t from 246m
  • 34m at 1.8g/t from 40m

With mineralisation at Eagle confirmed at more than 300m strike and to 300m depth and remains open, with highlights of:

  • 123m at 1.0g/t from 229m, including 26m at 1.8g/t from 237m and 39m at 1.6g/t from 311m
  • 35m at 0.7g/t from 51m, including 10m at 1.1g/t from 51m and 5m at 1.5g/t from 70m

Is this the time to get De Grey share price at a discount?

The progress DEG is making at Hemi has been exciting to watch and the project is shaping up to be on of Australia’s most prominent gold discoveries in recent times.

Managing Director Glenn Jardine commented on DEG’s rapid progress:

Falcon was discovered in September 2020 and has also grown substantially. The Diucon and Eagle discoveries were announced in January this year after positive results in initial wide spaced RC drilling. Additional RC drilling has now rapidly expanded the mineralised footprints at both zones which both remain open.

Extensional drilling is continuing at Diucon and Eagle. A fourth RC rig will be mobilised to site this month to allow for the commencement of RC drilling at the Scooby intrusion. This follows encouraging results in aircore drilling at Scooby announced in January.’

So, it sounds like we can expect to see a continuous stream of results over the coming months.

As for the share price?

With the gold price tipped to fall over the short term, we could see the DEG share price follow.

But remember, speculators sent DEG shares to $1.60 in September last year.

And the resource has grown significantly since then.

Which begs the question: What price will it reach once we see a fresh resource estimate?

That could be a while away yet but it’s a question worth pondering if you’re looking for shares at a discount.

The DEG share price could also be bolstered further in the coming months and years as Australia begins to surpass China as the gold capital of the world. In her latest report, gold expert Shae Russell breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.


Lachlann Tierney

For The Daily Reckoning Australia