Red Mountain Mining Share Price Spikes on Maiden Drill Results
Microcap gold explorer Red Mountain Mining Ltd [ASX:RMX] has watched its share price spike today upon results from its maiden drill program at the Mount Maitland Gold project in WA.
RMX shares entered a trading halt on Monday pending the initial drill results.
Shares in the gold explorer soared in early October when RMX first announced drilling would commence at the project.
Since then, we’ve seen a rapid rise in the share price leading up to today’s results.
At the time of writing, RMX shares are trading just shy of their 52-week high of 1.8 cents per share.
The explorer is currently up 14.29%, trading at 1.6 cents per share.
A good start but don’t jump the gun
The thing you need to remember with small resources stocks is that they’re highly speculative —nothing is a sure thing.
Yes, today’s news is positive but there are a few things you should be aware of.
Initial assays at the Mount Maitland South prospect deliver shallow high-grade gold results, including:
- 7m at 3.3 grams of gold per tonne (g/t) from 34m, including 1m at 12.7 g/t from 37m
- 8m at 1.7g/t from 107m, including 1m at 7.1 g/t from 110m
RMX says that the shear zone mineralisation remains open to north, south and at depth.
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To be fair, if mineralisation wasn’t open at this early stage of exploration, they could be in some trouble.
Source: Red Mountain Mining
The figure above illustrates the narrow nature of the mineralisation at the Mount Maitland South prospect.
Not necessarily bad news, just something you should be aware of in order to set correct expectations.
The Mount Maitland South prospect is a 550m-plus long outcropping shear zone within a larger 19km strike zone.
Only four drill hole results were released today out of a total 27 for approximately 1,850m, so bear that in mind.
What are Red Mountain’s prospects?
Gold was first discovered at Mount Maitland in 1898, and historic records show an average production grade of 19g/t.
RMX’s current programme is focused on four primary targets: Mountt Maitland South, Lenanphyl, Second Chance South and Jacia.
We’ve got a sample of Mount Maitland South today.
The Lenanphyl prospect is characterised by a series of historical shafts, workings and drilling containing significant results.
Second Chance South prospect is a target that has never been tested by drilling. However, intersections show some encouraging minor zones of sulphide bearing quartz veining.
The Jacia prospect is a multi-element anomaly containing gold, silver, zinc and copper, although less attention was given to this area under the current programme.
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For The Daily Reckoning Australia