Maiden Resource Resurrects Canterbury Resources’ Share Price
Canterbury Resources Ltd’s [ASX:CBY] share price has more than doubled today on the back of announcing its maiden resource estimate.
CBY’s shares had been sluggish over the past 12 months and is still down 33.33%.
However, that could change over the coming days with the gold explorer detailing its resource estimate at its PNG project.
At time of writing the CBY share price is up 79.78% or 7.1 cents to trade at 16 cents per share.
Gold resource not guaranteed
CBY shares soared to 23 cents per share in the opening minutes of trade before cooling off.
The share price action was spurred on by estimates for the Idzan Creek and Wamum copper-gold deposits.
Both deposits are located on the Wamum Project in PNG.
Wamum is located 15–20km northwest of the major Wafi-Golpu development project owned by Newcrest Mining Ltd [ASX:NCM] and Harmony Gold.
With a neighbour like NCM you might expect some serious mineralisation.
And that’s what CBY has demonstrated.
Though there is a caveat, which I will cover shortly.
Source: Canterbury Resources
Essentially, Wamum hosts a large gold-copper deposit.
The Idzan Creek deposit has been given an inferred mineral resource estimate containing 2.2Moz of gold and 288kt copper.
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Idzan Creek exhibits average gold grading.
The gold grading comes in at 0.65 grams per tonne with 0.28% copper.
The mineralisation at the Wamum deposit is even lower in grade, coming in at 0.15g/t with 0.29% copper.
It was given an inferred mineral resource estimate of 0.5Moz gold and 281kt copper.
But despite the low gold grading, the mineral resource is estimated to be quite significant.
However, that catch is CBY has yet to be granted an exploration licence for the project.
And there is no guarantee the licence will be granted.
The company lodged the licence application in February this year.
But the assessment and approval process has been delayed due to COVID-19.
CBY have not advised when the application will be assessed.
Where is the Wamum Project headed?
The first hurdle CBY could face in the application assessment is the cultural claims on the land.
Wamum is located nearby the Ono River in relatively rugged and forested hill country at an elevation of around 900m.
The area is claimed by the Wamum clan.
So, there may or may not be complications due to current claims.
Although, Barrick Gold Corp [NYSE:GOLD] conducted drilling programs at Idzan Creek and Wamum in 2009.
More recently, NCM explored the area, including some deeper drilling and a geophysical survey.
Sovereign risk in developing countries like PNG are not uncommon.
And should always be considered by smart investors.
Though the gold-copper resource is certainly attractive, there is plenty of action back on home soil. Aussie gold stocks could be in for a boom as Australia looks to cement itself as the gold ‘epicentre’.
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For The Daily Reckoning Australia