Does the Tesoro Resources Share Price Hint at a Broader Trend in Gold?
The share price of Chile-focused gold explorer Tesoro Resources Ltd [ASX:TSO] is flat at time of writing, trading at 29 cents after announcing large surface gold at its El Zorro Gold Project.
Yesterday we looked at the Hawkstone Mining Ltd [ASX:HWK] share price after it announced seemingly positive news but saw no share price action.
Like many other Aussie gold stocks, TSO is coming of its recent high, tracking the gold price as it seeks out its new level.
What we could be seeing here is that the initial excitement of a red-hot gold price potentially inflated some of these Aussie gold stocks.
But with the excitement cooling off, does that mean stocks like TSO have had their run?
In my opinion, no and here is why.
Tesoro’s prospects haven’t changed
The trend and style of the mineralisation at El Zorro has remained consistent throughout the year during its big share price run up.
Have a flick through yourself — we have covered TSO plenty here.
El Zorro is shaping up to be a high-tonnage, average grading project.
And what I mean by that is an average gold ore grade is typically between 0.5 and 1.5 grams per tonne (g/t) in open pit mining.
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Anything above or below is high- or low-grade.
Today, TSO reported extensive surface gold mineralisation defined over an area of 650m by 500m, immediately south of the Ternera Gold Deposit.
- 00m at 1.48g/t, including 1.00m at 22.30g/t
- 00m at 2.16g/t, including 1.00m at 42.70g/t
- 00m at 1.23g/t, including 8.00m at 3.14g/t
Source: Tesoro Resources
A point to note here is that this area over mineralisation occurs south of a previously defined system, meaning there could be potential for extending the system.
TSO Managing Director Zeff Reeves commented:
‘El Zorro continues to deliver exciting exploration results and these results from Toro Gordo further enhance the scale and prospectivity of the project. Surface gold mineralisation is now continuous from Toro Gordo, to the north of Ternera, over 1,500m of strike. To have results such as these consistently returned over a large area is encouraging and drilling is planned at Toro Gordo in early 2021.’
So, what’s with the Tesoro share price?
We’ve been seeing a sell-off in speculative gold stocks recently, with punters taking profits on a now cool (but still historically high) gold price.
The interesting thing to note about TSO is its current share price level.
Taking a look at the first graph, the share price looks be to leveling out at its current price now of 29 cents per share.
It could hold here until we get some ‘momentum changing’ news.
This could be in the form of development plans at El Zorro, bigger than anticipated resources, drastic swings in the gold price — anything really.
Some of those outcomes are more probable than others and I believe it will be the macroeconomic factors surrounding the gold price that will spur on the TSO share price.
But it’s not just me our resident gold expert Shae Russell is tipping Australia to become the new gold epicentre. If Australia knocks China off the top spot, we could see more attention given to Aussie gold stocks like GSM. In her free report, Shae details why this could mean big spikes for Aussie gold stocks and what to look out for. If you’re interested, get your free copy here.
For The Daily Reckoning Australia