Does the Renascor Resources Share Price Have Gold Fever?
Renascor Resources Ltd [ASX:RNU] is a graphite explorer and developer, but its share price is up big today with a gold discovery announcement.
RNU holds a number of tenements in key mineral provinces in South Australia.
Its main project, the Siviour Graphite Project, now boasts the largest reported total ore reserve of graphite outside of Africa.
And the second largest in the world.
Though the RNU share price has been recovering nicely from the market crash in March, today’s announcement appears to have injected it with new vigour.
At time of writing, RNU shares are up 23.08% to trade at 1.6 cents per share.
The rise of the hybrids
Earlier in the year I noted what seemed like an increase in gold finds across Australia.
It felt like there was no end to small-cap gold explorers announcing drilling results.
Not surprising given the rise in the gold price.
Now we could be seeing a new phenomenon unfolding:
The rise of hybrid explorers and developers.
With the record price of gold, other mineral explorers seem to be piling onto the gold train.
Take Altura Mining Ltd [ASX:AJM] for example — which we covered yesterday.
The reason why I bring this up is because the rush to uncover more gold in Australia could have big impacts on Aussie gold stocks.
One gold expert is predicting big spikes in Aussie gold stock prices as this new gold rush heats up.
Now that the gold price is nearing US$2,000 per ounce, even graphite miners like RNU are jumping into the ring.
Do I want the gold RNU has?
There are plenty of gold stocks to invest in on the ASX.
Which means you need to be discerning, i.e:
Do I want a graphite miner to become a gold miner?
A fair question.
As an investor you want a company to deploy its capital sensibly to get the greatest return possible.
Are there any synergies between gold mining and graphite mining?
I am unsure of the answer myself; but they are questions that must be asked.
There are no guarantees RNU will become a fully-fledged gold miner.
And going after gold is by no means a silly move.
Its announcement today relates to some shallow, high-grade gold targets at its Carnding Project.
- 7m at 5.14 grams of gold per tonne (g/t) from 26m, including 2m a 16.42 g/t from 30m
- 6m at 4.94g/t from 14m
Carnding is located in the Central Gawler Craton, which is currently experiencing increased gold activity.
A potential move RNU could be looking at is hoping to discover a sizeable gold resource that can be sold to a gold developer.
The sale would open up opportunities to further develop their graphite project.
Though it is very early days for RNU, their gold discovery is just another example of how the Aussie gold scene is heating up.
Discover why this gold expert is predicting a further spike in Aussie gold stock prices and why Australia is set to become the new gold ‘epicentre’. Download your free report now.
For The Daily Reckoning Australia