De Grey Mining Share Price is Down on Gold at Gillies (ASX:DEG)

De Grey Mining Share Price is Down on Gold at Gillies (ASX:DEG)

At time of writing, the De Grey Mining Ltd [ASX:DEG] share price is down more than 1% today, trading at $1.05 cents.

DEG shares snapped a downtrend earlier this month, but have continued their slide over recent sessions:

ASX DEG Share Price Chart - De Grey Mining

Source: Tradingview.com

We take a quick look at the latest announcement and the prospects for a breakout in the gold price which could drive DEG shares higher.

Highlights from Gillies announcement

Here they are:

• Intersection returns 52m @ 0.7g/t Au from 53m in GLRC016 including: ‒ 15m @ 1.8g/t Au from 90m in GLRC016

• New shear hosted gold target identified in broad spaced RC drilling at the Gillies prospect within the Farno Joint Venture (“Farno JV”), located 30 km southwest of the Hemi gold discovery

• De Grey undertook the drilling to increase its equity from 30% to a 75% interest in the Farno JV which consists of tenement E47/2502. De Grey is the JV manager with TSX listed Novo Resources Inc (TSX: NVO) its 25% partner.

• A +2000m follow-up RC drilling program is planned for Q2 2021. Additional aircore drilling is planned to test numerous bedrock gold anomalies, including a number of Hemi style intrusion targets within the Farno JV.

Given the market’s reception of these grades, you could interpret these results as slightly disappointing.

It’s also worth noting that this is early days for the Farno JV area.

The real question is whether gold can push higher and drag the DEG share price out of its slumber.

Gold price not helping DEG’s case at the moment, but patience could be key

This is the gold price in AUD:

ASX DEG Share Price Chart - De Grey Mining

Source: Tradingview.com

It doesn’t look great, but it may have just bounced off support dating back to 2019.

I chose the gold price in AUD this time because the USD is starting to strengthen, albeit it’s still a long way off March 2020 levels.

Gold investors are known for their patience so it could be a similar story here.

If anything, I think the support indicates that this could be one of the final buying opportunities for Aussie gold investors.

If you’re tempted to agree, then you should check out what’s happening with exploration spend by gold stocks in Australia right now. It’s a compelling case for the current potential buying opportunity.

Regards,

Lachlann Tierney
For The Daily Reckoning Australia

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