Predictive Discovery Share Price Down — Gold Price Cooling (ASX:PDI)
For many of Australia’s small-cap gold stocks, 2020 was a year to remember.
But with the gold price now cooling, so too have the share prices of some of the fastest-growing gold companies.
However, this hasn’t necessarily been the case for West Africa-focused explorer Predictive Discovery Ltd [ASX:PDI].
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At the time of writing, the PDI share price is down slightly, dipping by 1.72% to trade at 5.7 cents per share.
Unlike some of its peers, The PDI share price appears to have retraced its gains only moderately and has seemingly found its floor just below the six-cent mark.
Predictive announces substantial gold find
Today, the gold explorer released further results from its infill drilling program at the Bankan Gold Project in Guinea.
Results confirmed a substantial zone of shallow oxide mineralisation at the NE Bankan prospect, with deeper drilling highlighting very broad widths and good hole-to-hole continuity, as well as depth continuity.
- 34 metres at 1.4 grams of gold per tonne (g/t) from 179 metres.
- 28 metres at 1.8 g/t from 218 metres.
- 24 metres at 3.1 g/t from 32 metres, including two metres at 11.45 g/t from 49 metres.
- Five metres at 4.1 g/t from 84 metres, including one metre at 16.5 g/t from 87 metres.
Source: Predictive Discovery
Managing director Paul Roberts succinctly summarised what today’s results mean for the project:
‘This program has shown that the NE Bankan gold zone in this area is almost continuously gold mineralised over approximately 200m of horizontal width to depths of 50-70m. What this indicates is a deep, broad zone of soft, deeply weathered bedrock material which has potential to substantially improve the Project’s economics.’
What’s with the PDI share price?
Today’s results do seem like positive ones.
So, you might be wondering, ‘What’s with the share price action?’
Well, if you take a look at the PDI share price chart above, you’ll notice there hasn’t been much in the way of ‘big’ share price movements since August last year (the peak of the gold rally).
Compared to its peers, the PDI share price has actually been rather stable — not experiencing the same volatility.
For one, exploration has been pretty straightforward.
There haven’t been any major surprises, good or bad.
Sure, PDI has managed to expand the resource some and has identified nearby prospects, but nothing to the extent that should cause massive amounts of excitement.
Secondly, we’ve known about the rough size of the NE Bankan prospect for a while.
Each new set of results seems to confirm the continuity of the mineralisation.
By now, investors and PDI probably have their suspicions about the size of the mineralised zone.
So, unless something unexpected shows up in drilling, I wouldn’t expect to see too much of a rapid change in the share price.
What could put wind in PDI’s sails is the planned metallurgical test work in April.
This will give us a better peek at the potential mine economics.
For now, PDI seems to be progressing well.
And until it begins to transition into development, the share price may just plod along as it is.
Although, our resident gold expert Shae Russell reckons there is a gold rally on the horizon this year, albeit delayed by a flying Aussie dollar:
‘The current setup isn’t great for gold miners, but the double whammy of a falling US gold price and the strong Aussie dollar presents a rare opportunity for Aussie investors to get gold on the cheap.’
Shae has also provided a longer-term positive outlook for Aussie gold stocks, as Australia surpasses China as the undisputed global leader in gold exploration, mining and production. In our latest report, Shae breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.
For The Daily Reckoning Australia