Firefly Resources Emerges with Bonanza Grade Gold (ASX:FFR)
Mirco-capped gold explorer Firefly Resources Ltd [ASX:FFR] has returned to trading today, with the discovery of extremely high gold grades at its recently acquired Yalgoo gold project.
The FFR share price has responded positively, jumping nearly 46% to trade at 17.5 cents per share.
FFR completed the acquisition of Yalgoo in WA at the end of July for $2.91 million, payable in FFR shares.
Yalgoo will bring FFR’s WA gold projects to a total of three.
Joining the Paterson copper-gold project and the Forrestania gold project.
Potential for tier-1 type project
In mining, a Tier-1 mine is said to be a ‘company making’ mine.
Specifically, a Tier-1 mine will produce greater than 250,000 ounces of gold per annum.
And will usually have a mine life of 20 years or greater.
But what makes these kinds of projects especially attractive is that they have very robust economics.
Meaning they can be developed irrespective of where we currently are in the business cycle.
Or whether the deposit has been fully explored.
FFR could be sitting on a project with this potential.
Yalgoo is situated between two big players.
Ramelius Resources Ltd [ASX:RMS] has the 6Moz Mount Magnet gold mine and Silver Lake Resources Ltd [ASX:SLR] has the Deflector copper-gold mine.
Of course, just owning tenements near other large gold mines doesn’t guarantee you’ll uncover a huge resource.
But it might improve your odds.
FFR’s first round of results from their new project do hint towards good potential.
Highlights from the first assays include:
- 6m at 244.9 grams of gold per tonne (g/t) from 50m, including 1m at 1,439.55g/t from 51m, and 1m at 16.95g/t from 55m
- 13m at 3.65g/t from 113m including 4m at 9.19g/t from 119m
- 9m at 1.32g/t from surface including 1m at 4.76g/t from 7m, 1m at 3.49g/t from 96m
Those are some impressive grades.
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Source: Firefly Resources
A good start but a long way to go
FFR’s share price action today shouldn’t come as much of a surprise, given that gold grades above 1,000g/t are rarely seen.
Though, in my opinion, what has really driven up the share price today is the location of the finds.
Yalgoo has previously been explored.
But more than 15 years ago.
According to FFR, today’s results are from outside the historical resource envelope.
Which highlights the potential to upgrade and grow the resource base.
Today’s results are just a part of the phase one drilling program, which was primarily designed to validate the historical mineral resource estimate.
To date 1,200m of 10,000m has been completed.
So, the process of exploration is still unfolding.
Companies like FFR could be poised for further success.
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For The Daily Reckoning Australia