Is the Great Southern Mining Share Price on a Road to Recovery?
The month of September seems to have breathed new life into the share price of Great Southern Mining Ltd [ASX:GSN].
With the announcement of gold extensions at its Cox’s Find Project today, GSN shares might be able to reclaim some of last month’s losses.
Since the beginning of the month, shares have begun to dig themselves out of the rout they faced in August.
Although this rally could be short lived.
The GSN share price opened strongly at the beginning of trade today, reaching 13 cents per share.
At time of writing, the GSN share price is trading 4.35% lower, sinking to 11 cents per share.
Good grades continue but investors unimpressed with GSN’s results
GSN’s results today are the remaining drill holes from the second phase of drilling at Cox’s Find in WA.
Though the company say they are pleased with the initial results, investor reactions are less optimistic.
Drilling results from Cox’s Find have yet to be met with positive share price action.
So far there have been three rounds of drilling results released (highlighted by the green bars above).
I’m not entirely sure what the initial expectation was, but GSN doesn’t seem to be living up to it.
Let’s take a look at what they’ve found so far.
Highlights across phase two drilling include:
- 6m at 8.03 grams of gold per tonne (g/t) from 169m including 1.0m at 27.5g/t
- 65m at 80.0g/t from 160m including 1.1m at 404g/t
- 5m at 5.51g/t from 59m including 2m at 12.5 g/t
- 7m at 1.23g/t from 86m including 2m at 2.94 g/t
- 15m at 1.01g/t from 167m and 6m at 0.62g/t from 157m including 1m at 2.57g/t
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Which is nothing to sneeze at.
So why is the share price sinking?
In my opinion, the market was too quick to act on the initial gold find at Cox’s Find.
Which could explain why the share price is retracing to the ‘pre-discovery’ level.
What’s Great Southern Mining worth?
Cox’s Find has a brief history of gold mining from 1935–42, with an impressive average grade of 21.94 g/t.
Which means there could be serious potential at the project.
And results thus far are promising.
All we know, however, is that high-grade mineralisation persists at depth and along strike at Cox’s Find.
GSN said it would now review the current results to delineate targets for further drilling.
Results are expected in the coming weeks for two priority regional gold targets 400m and 1000m to the north of the main Cox’s Find deposit.
Which have potential to extend the known mineralisation.
In my books, the share price could find its floor around the 10-cent mark until there is a clearer picture of the resource size.
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For The Daily Reckoning Australia