Sporadic Grading Pushes Hawkstone Mining Share Price Lower

Sporadic Grading Pushes Hawkstone Mining Share Price Lower

The Hawkstone Mining Ltd [ASX:HWK] share price has fallen off a cliff today on the back of results from its Lone Pine gold project in Idaho, US.

At time of writing, HWK shares are down 11.77% to trade at 1.5 cents per share.

The Hawkstone Mining Ltd [ASX:HWK] share price has fallen off a cliff today on the back of results from its Lone Pine gold project in Idaho, US.

At time of writing, HWK shares are down 11.77% to trade at 1.5 cents per share.

Although the share price has picked up steam following our last check-in, the US focused explorer has been on a downward trend since late August.

ASX HWK Share Price Chart

Source: Tradingview

In fact, the share price is back at the same price it was 12 months ago.

High-grade results disappoint

Hawkstone released its initial drilling results from Lone Pine this morning after bit of a build-up in suspense.

In early August, HWK mobilised an additional larger drill rig to Lone Pine with the aim of achieving a maiden JORC compliant resource estimate.

Unfortunately, the drilling did not yield very encouraging results.

Though the drill hole did intersect high-grade gold mineralisation, the thickness has been called into question.

Drilling highlights include:

  • 02 grams of gold per tonne (g/t) over 1.22m, including 65.6g/t over 0.31m
  • 6 g/t over 0.45m
  • 06 g/t over 2.63m, including 1.37m at 13.23g/t

Which could be responsible for today’s share price decline.

The grading of gold is excellent and what every explorer would want to see.

But the thickness of the mineralisation leaves a lot to be desired.

Though there’s a bit more to the story.

Firstly, keep in mind the results come from the first seven holes drilled at the project.

The purpose of initial drill holes is usually to confirm the presence of gold hosted in some form of geological system.

Which HWK have done — just not in the most dramatic fashion.

Secondly, today’s results do not necessarily hinder the potential of the project.

Take a look at the figures below.

ASX HWK Cross Section 1 - Lone Pine Gold Project

Source: Hawkstone Mining

ASX HWK Cross Section 2 - Lone Pine Gold Project

Source: Hawkstone Mining

Notice the red bars?

This is the estimated position of the gold quartz vein that HWK is testing.

Right now, we do not know what lies beyond that.

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Hawkstone Managing Director Paul Lloyd commented:

Our geological team are on a steep learning curve as this is the first drilling program on this project. I am confident that the acquired knowledge will greatly assist with this program and our regional ambitions in the Lone Pine area, that is proving to be highly mineralised and demonstrating significant upside potential.’

Next steps

HWK said it will continue to drill along the mineralised structure to define strike and depth extent.

The program is planned to continue until the end of the 2020 field season.

In my opinion, we could see the HWK share price sink a little lower over the coming months.

Results from its King Solomon Mine, released in late August, caused the share price to sink much like today.

At present, they appear to be struggling a little with understanding the local geologies.

Kind regards, 

Lachlann Tierney

For The Daily Reckoning Australia

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