Legacy Iron Ore Share Price Soars on Gold Recovery (ASX:LCY)

Legacy Iron Ore Share Price Soars on Gold Recovery (ASX:LCY)

Shares in iron ore and gold developer Legacy Iron Ore Ltd [ASX:LCY] have spiked today thanks to solid metallurgical test work results from the Mt Celia Gold Project in the Eastern Goldfields of WA.

The LCY share price has nearly recovered to its 52-week high it reached in October before it trailed off in November on the back of weaker gold prices.

ASX LCY Share Price Chart

Source: Tradingview

With strength returning to both the iron ore and gold prices, we could see LCY shares lift even further in the last month of 2020.

At the time of writing, LCY shares are up 14.29%, trading at 0.8 cents per share.

Will high recovery pave way for higher share price?

LCY announced ‘excellent metallurgical test work results’ this morning from its Mt Celia Gold Project.

Results showed high total metallurgical gold recovery of 96.5% at a grind size of 125 micrometres after 24 hours and 98.0% after 48 hours.

With gravity fed methods recording recovery of 53%.

Legacy’s CEO Rakesh Gupta commented on the results:

The gold recoveries are extremely high, with plenty of gravity recoverable gold and overall gold recovery in the high nineties depending on what grind size you process them. It clearly shows that this material could be processed at any conventional gold processing facility in the area or through our own facility.’

LCY say that testing demonstrates the Mt Celia Gold Project hosts free milling gold ores, suited to processing through conventional processing facilities ubiquitous to the WA Goldfields.

Which means that not only do LCY have an efficient and industry-standard system of extracting gold from ore, but they also have a cost-effective method too.

The metallurgical program has been separated into two stages, Stage 1 tested samples from drilling completed in May 2020, and Stage 2 will test drill holes completed in September 2020.

LCY said it is now conducting Stage 2 metallurgical testing on the additional three composite samples from the later drilling.

Which is expected by the end of this year, with reporting soon after.

Outlook for Legacy Iron Ore

As I mentioned before, both iron ore and gold have strengthened recently.

With iron ore the star performer.

Iron Ore and Gold Price Chart

Iron ore (red) and gold price (white), Source: Tradingview

LCY’s Mt Celia Gold Project isn’t particularly large in terms of its gold endowment, having an inferred mineral resource of 184,000 ounces with a grade of 1.68g/t.

Not a ‘company-making’ resource, but certainly nothing to turn your nose up at either.

Its Mt Bevan Iron Ore Project is considered to hold excellent potential for the definition of major magnetite resources and hosts 1,170 Mt of magnetite resource at 34.9% iron.

However, the project now awaits funding of further phases for the project.

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Lachlann Tierney

For The Daily Reckoning Australia