Musgrave Minerals Share Price Down, New Gold Find Disappoints

Musgrave Minerals Share Price Down, New Gold Find Disappoints

The share price of Musgrave Minerals Ltd [ASX:MGV] has dipped this morning on the news that it has located a new gold lode just south of the Starlight discovery.

With the price of gold still trending upwards, the MGV share price has sunk 3.81%, or two cents to trade at 50.5 cents per share.

Prior to today, it soared throughout June thanks to high-grade gold finds at Starlight — shares are still up ~90%.

With the latest drilling results from its Cue Gold Project out this morning, investors could be worried there may be less gold than they hoped.

Spoiled for gold

There are a couple of ways to consider MGV’s share price action today.

The first: the new gold lode, which has been named ‘White Light’, is located 75 metres south of Starlight.

Meaning Starlight may be cut off to the southwest.

Not the worst news ever, since there is a new gold lode located parallel, but the potential for expanding the Starlight resource may now be a bit more limited.

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ASX MGV Gold Project Cross Section

Source: Musgrave Minerals

On the other hand, there is potential that these two sections could link up with further exploration.

To be clear, the news of the White Light find is not necessarily negative.

It is just that continuity of a resource is preferred because that would mean more gold and less dirt.

Drilling highlights were decent too:

  • 6m at 54.4 grams of gold per tonne (g/t) from 211m
  • 6m at 5.4g/t Au from 111m
  • 9m at 5.1g/t Au from 21m

MGV also said that both Starlight and White Light remain open to the southeast and down.

The second consideration: the ASX has been inundated with small-cap explorers talking of ‘new, high-grade finds’.

If you follow The Daily Reckoning Australia you’re probably well aware of this.

The mindset of some investors could be ‘why buy a company with an OK gold resource, when I can buy a company that believes it has a massive resource?’.

That could be the case with MGV today.

More gold better than none

The Cue Gold Project host’s total resources of 6.45Mt at 3.0g/t for 613,000 ounces of gold including the Break of Day deposit which contains about 199,000oz.

MGV said drilling will continue at both lodes and will focus on infilling and extending the gold mineralisation.

Drilling will also continue to test for new lodes within the Break of Day and Lena system.

Managing director Rob Waugh said that the drilling program had now been extended thanks to the White Light discovery and a resource update can be expected late next quarter.

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Kind Regards,

Lachlann Tierney,

For The Daily Reckoning Australia