De Grey Mining Share Price in Breakout with Gold Extension (ASX:DEG)
The De Grey Mining Ltd [ASX:DEG] share price has broken through resistance and has shot up after being released from a trading halt yesterday.
The push upwards comes after news of further mineralisation extensions at Hemi.
When we covered DEG last week shares had met resistance at around the 85-cent level.
A week on and DEG has now broken through that level and reclaimed the key $1 mark.
At time of writing, DEG shares are up 15 cents or 16.95% to trade at $1.035 per share.
The new bout of upwards momentum lands shares close to their 52-week high of $1.065.
Drilling significantly extends Crow
Last week I noted that the reason for the recent price resistance could stem from a shortage of tangible new information coming out of Hemi.
Though results claimed to grow the mineralisation, they appeared to be confirming investors’ expectations.
Not a bad thing.
Just not enough to get the share price going.
Like we discussed last week, it felt like investors were holding out for something more significant.
Something that would likely increase the gold endowment at the project.
Today’s drilling results have transformed the original perceptions at the Crow zone on the Hemi gold discovery.
That’s according to DEG Managing Director Glenn Jardine.
‘[Results] demonstrate the potential for Crow to significantly add to the overall gold endowment at Hemi and to meaningfully contribute to a potential large scale, near surface open pit production scenario. The mineralised footprint at Crow is currently approximately 1,000m by 400m and remains open.’
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- 64m at 13.4 grams of gold per tonne (g/t) from 141m in hole HERC238, including 19m at 42.0g/t from 170m (which in turn includes 8m at 84.7g/t)
- 12m at 2.4g/t from 109m
- 24m at 1.1g/t from 51m
- 31m at 2.2g/t from 69m
Results are visualised below.
Source: De Grey Mining
Notice the thick gold mineralisation in the centre.
According to DEG it is the best result drilled on the project to date.
Hemi shaping up to be a tier-1 deposit
Mr Jardine said DEG is making progress towards turning Hemi into a tier-1 scale gold deposit.
A tier-1 gold asset is a mine with a stated life in excess of 10 years, annual production of at least 500,000 ounces of gold.
Which will put Hemi up there with Olympic Dam, Broken Hill and Cadia East mines.
There is little doubt of DEG’s success thus far.
Its share price rise of ~1,600% in the past 12 months is a tribute to their success.
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For The Daily Reckoning Australia