Predictive Discovery Share Price Sinks on African Discovery (ASX:PDI)

Predictive Discovery Share Price Sinks on African Discovery (ASX:PDI)

Africa focused gold explorer Predictive Discovery Ltd [ASX:PDI] has seen its share price reverse almost all monthly gains on the back of drilling results at its Kaninko Gold Project in Guinea.

The very same gold discovery that sent its share price rocketing ~716% in one day has now begun to take back some of those gains.

At time of writing the PDI share price is down 8.14% to trade at 7.9 cents per share.

The gold explorer is still up 628.16% over the past 12 months.

ASX PDI Share Price Chart - Predictive Discovery Shares

Source: Tradingview

Bankan gold discovery, outstanding to unimpressive?

When we were first given a sample of what could be underground at Kaninko, investors seemed eager to jump aboard PDI.

Results did seem promising.

Initial drilling demonstrated the presence of very broad high-grade gold intercepts.

This included:

  • 46m at 6.58 grams of gold per tonne (g/t) from 4m, including 10m at 26.52 g/t from 34m
  • 42m at 2.92 g/t from 8m
  • 50m at 1.53 g/t from surface, including 20m at 2.51 g/t gold from 30m

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Which are decent results given how close to the surface they are.

Just as impressive is that PDI had managed to take the Kaninko project from a greenfields tenement with no known history of past exploration, to what could be a significant gold discovery.

But as we’ve come to see more frequently, investors on the ASX are spoiled for gold right now.

If an explorer doesn’t produce bonanza grade gold with a more than one million-ounce resource, the share price sinks.

I’m being hyperbolic, of course.

But you get my drift.

Take Blackham Resources Ltd [ASX:BLK] for example.

They shed 11% on the back of high-grade gold results.

PDI’s results today are a little trickier — and more speculative.

Yesterday we saw a good example of how complicated results can be unfavourable to the share price.

It could be the same today.

It pays to be consistent

Results from 12 reverse circulation drill holes revealed similar levels of gold mineralisation to what we saw back in April.

One of the differences being there were less zones containing very-high-grade mineralisation.

Some highlights include:

  • 99m at 1.17 g/t from 1m
  • 15m at 3.42 g/t from surface, including 4m at 9.33g/t
  • 33m at 1.72g/t from 67m, including 1m at 22.1g/t

In open pit mining (usually done close to the surface) a grade of 0.5 to 1.5g/t is considered average.

So, these aren’t awful results.

Perhaps investors were expecting better.

Another possible explanation is where the drill hole ended.

Which is in the transition from weathered rock (on top) and fresh rock (below).

Though PDI are nowhere near development at Kaninko yet, extraction of gold from fresh rock can require a more process heavy method.

However, the results could suggest mineralisation continues at depth and into the underlying fresh rock.

With drills still running on site and PDI being fully funded thanks to a recent $9 million cap raise, we could see this resource grow still.

We’ll be sure to keep you updated with developments from some of Australia’s most interesting gold explorers and miners. In the meantime, make sure you subscribe to The Daily Reckoning Australia. It’s a great way to stay ahead of the curve when it comes to Australian gold stocks. It’s free too. Subscribe here.

 

Kind Regards,

Lachlann Tierney,

For The Daily Reckoning Australia