Hawkstone Mining Share Price Climbs with King Solomon Acquisition
Hawkstone Mining Ltd [ASX:HWK] has consolidated its holdings in the Lone Pine area in Idaho with the acquisition of the King Solomon gold mine.
HWK has signed an option agreement to acquire the site from Jervois Mining Ltd [ASX:JRV].
The HWK share price has been on the up since last we covered the US-based gold explorer.
Shares are up 15.39% to trade at 1.5 cents per share at time of writing.
Since the announcement of their maiden drilling program last month, the stock has risen nearly 67%.
Hawkstone Mining and the art of the deal
Usually when we hear of acquisitions in mining or mineral exploration, we typically think of a price tag in the millions.
After all, if there’s gold below the surface you’re not going to give it away cheap.
This hasn’t been the case with HWK.
Hawkstone picked up Lone Pine in late February for a cool US$510,000.
The price tag for the King Solomon Mine: US$19,000.
There are, of course, similar caveats with King Solomon as there was with Lone Pine.
That is the area hasn’t been explored for close to 30 years.
Some initial drilling in the early 1990s did turn up some interesting results.
- 5m at 14.9 grams of gold per tonne (g/t)
- 5m at 14.8 g/t
- 0m at 3.75 g/t
- 0m at 2.3 g/t
- 5m at 3.9 g/t
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King Solomon is located 900m southeast of the Lone Pine.
According to previous exploration data, there appears to be broad northeast trending, southeast dipping mineralised zone parallel to the Lone Pine Vein Zone.
Gold or bust?
If there’s gold there, then why so cheap?
Firstly, the historical works done tell us very little other than there is gold mineralisation in the area.
There’s no indication about how much is actually there.
So, the buyer has to accept the (big) risk that there may not be enough gold below the surface for the project to become economically viable.
Such is the risk of all speculative gold stocks.
Secondly, results aren’t logged to and reported to a standard required by the JORC code.
Which is basically the professional code of practice that sets minimum standards for reporting mineral resources.
Think of it this way.
If you’re buying a used car, sometime the seller is willing to sell the car without the roadworthy for a discount.
The risk you take in agreeing to these terms is that you may have to sink far more money than you saved in getting the car up to scratch.
HWK is now completing due diligence at King Solomon and drilling at Lone Pine is ongoing.
The beauty of the option agreement is that HWK only stands to lose US$1,000 should it decide not to purchase the site.
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