Metalicity Share Price Up as Drilling Finally Gets Underway (ASX:MCT)
Australian small-cap explorer Metalicity Ltd [ASX:MCT] is up 14.29% at the time of writing, to trade at just under one cent per share.
Primarily focused on the base metals sector and the development of its Admiral Bay Zinc Project, MCT has spent the best part of the past 12 months conducting operations at its Kookynie Gold Project in the WA Goldfields region.
Source: Trading View
The share price has remained depressed since August 2019, despite the release of drilling results indicating high-grade gold mineralisation.
The Kookynie Project also boasts some good company nearby.
It is located about 60km south-southeast from Leonora in WA.
The project also includes the historic Cosmopolitan mine, which produced 360,000oz at a very high average head grade of 15 grams per tonne.
According to MCT, limited work has been conducted in and around the Cosmopolitan gold mine and other prospects including Champion, McTavish, and Leipold.
So why the fanfare now?
If you feel like you have been inundated with news about junior gold explorers recently, then you might be onto something.
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Yesterday I explained that easing restrictions in WA has meant some explorers have been able to recommence previously halted operations — with their share prices reacting positively.
It could be a similar story with MCT today.
The junior explorer announced this morning it had commenced drilling at Kookynie, after their cap raise last week.
Managing Director Jason Livingstone said:
‘With the Company now funded post our recent capital raising, we now turn to continuing to develop the Kookynie Gold Project. An initial 40-hole RC programme is designed and is currently being executed to follow up the phenomenal drill hole results we published at Leipold and McTavish.’
Metalicity has defined a ‘exploration target’ of between 294,000 ounces and 967,000 ounces.
Given the prominence of and attention given to the gold price recently, it is easy to equate the dramatic increases in share price of junior explorers to hype.
Today’s announcement is more an operations update than anything else.
Be on the lookout
Over last few years we have seen the rise of the Penny West and Bellevue gold mines.
These are two old high-grade WA projects which were perhaps not given the respect they deserved, until recently.
Spectrum Metals Ltd [ASX:SPX] acquired Penny West in 2018, turning it into a success story after Ramelius Resources Ltd [ASX:RMS] acquired the company for ~$208 million this year.
Bellevue Gold Ltd’s [ASX:BGL] share price has rocketed from 2.5 cents to 60-plus cents per share since 2017, thanks to the success at its namesake historic project.
This is what MCT say they are aiming to replicate.
Turning an unloved goldfield into a success story is not impossible.
But it is worth taking a sceptical approach, there are more flops than there are success stories in gold exploration.
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