Ora Gold Share Price Soars on Production Prospect (ASX:OAU)

Ora Gold Share Price Soars on Production Prospect (ASX:OAU)

Microcap gold explorer Ora Gold Ltd [ASX:OAU] is one of the biggest movers on the ASX today after it announced the mining lease for its Crown Prince Gold Project has been submitted.

At the time of writing the OAU share price has rocketed 22.73% to trade at 2.7 cents per share on the back of a continued rally in the gold price.

ASX OAU Share Price Chart

Source: Tradingview

OAU has been a quiet achiever over the past 12 months, posting a decent 35% return despite copping a 55% loss during the March crash.

Another little producer you’ve never heard of

There have been several emerging, small-time gold producers popping into notoriety in recent times.

Yesterday we analysed Great Southern Mining Ltd’s [ASX:GSN] share price in its bid to begin production at one of its projects to fund exploration at the others.

The Red River Resources Ltd [ASX:RVR] share price is another example of how this strategy — of using small-scale production to fund exploration — is paying off.

Today, OAU announced it has lodged the application for a mining lease for the Crown Prince Gold Project in WA.

OAU said the mining lease application has progressed on schedule through the Department of Mines, Industry Regulation and Safety.

However, due to COVID-19, negotiations with native title owners had been delayed.

Though, OAU say good progress has been made this month with ongoing negotiations and a final resolution of the terms and conditions is expected early this year.

Why has Crown Price got the share price moving?

The Crown Prince project is one of three gold projects OAU currently hold and is probably the most advanced of the three.

Crown Prince has an Indicated Resource of 218,000t at 4.3 grams of gold per tonne (g/t) for 30,000 ounces of gold.

Now, this may only be a drop in the ocean to what some of Australia’s largest gold miners churn out, but with the historic gold price small projects like these can make sense for small-time producers.

And remember what I said about GSN and RVR.

The mineralisation at Crown Prince is located close to the surface; meaning production costs could be kept to a minimum.

OAU estimate with and all-in-sustaining-cost of AU$1,006 and an average gold price of AU$2,000, their net distributable surplus before tax will come in at $21 million.

Not bad seeing as that kind of cash could keep a small company like OAU funded for quite some time.

It will also provide them with the equity to further explore their Lydia Gold Project that has turned up results of 7m at 116.8g/t, including 794.2g/t from 9m.

For now, OAU could be worth keeping an eye on and if you’re interested in knowing more about the future of gold stocks in Australia be sure to check out our gold expert’s latest report. In it 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.

Kind regards,

Lachlann Tierney

For The Daily Reckoning Australia