Kalamazoo Resources Share Price Heats up with Pilbara Drill to Commence
The share price of Australian small-cap gold explorer Kalamazoo Resources Ltd [ASX:KZR] has risen slightly today as its maiden drilling program gets set to commence.
It has been a turbulent 12 months for the KZR share price, when we last covered the gold explorer its share price had climbed more than 40% in one day.
The volatility in the share price has waned in the past few months, largely due to a lack of price sensitive news from KZR with the explorer gearing up to beginning drilling.
At time of writing the KZR share price is up a modest 2.46% to trade at 62.5 cents per share.
What are investors expecting?
If you don’t follow gold stocks, you might be wondering why news that a drilling program is about to begin is driving the share price up.
Here are two possible reasons:
The gold price has increased and pushed up the share price — indeed, the price of gold is higher today.
Or investors have high expectations about KZR’s project.
The answer, in my opinion, is both.
KZR today announced that a roughly 5,700-metre drilling program has been designed for The Sisters Gold Project located in the Pilbara region of WA.
Five high-priority drill targets at The Sisters have been identified based on what KZR believes is extensive surveying.
The last news we received from The Sisters Project was back in early June, although that news failed to excite the share price at the time.
So, what’s different this time?
Interestingly enough, it could be what we know about one of KZR’s neighbours that is causing a return in interest.
The Sisters Project is located just south of De Grey Mining Ltd’s [ASX:DEG] Hemi prospect.
If you don’t know, Hemi is shaping up to be a major world-class gold discovery.
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In fact, KZR’s tenements are situated on the Wohler Shear Zone, which hosts much of De Grey’s gold resource including the Hemi gold deposit.
Source: Kalamazoo Resources
How good is this project?
We don’t know much about what lies underground at The Sisters just yet; aside from the priority targets that KZR plans to test.
There is a bit of a caveat though.
KZR are yet to receive approval for their drilling program.
Now, there is no reason stated as to why they would not receive approval and it’s very possible they will.
But just keep that in mind.
We’re also unlikely to see any drill results from The Sisters before the New Year anyway, with drilling planned to commence as soon as KZR finish current drilling at a different project.
With Australia gearing up to surpass China as the undisputed global leader in gold exploration, mining and production, we could soon see stronger upticks in stocks like KZR. In her latest report, gold expert Shae Russell breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.
For The Daily Reckoning Australia