Tesoro Resources Share Price Lifts with Big El Zorro Find (ASX:TSO)
The share price of Chile-focused explorer Tesoro Resources Ltd [ASX:TSO] has broken out of its downward trend thanks to promising news from its El Zorro gold project.
The small-cap explorer has made sizable progress up the charts, posting a year-over-year share price return of ~1,560%.
We last looked at TSO when it entered a trading halt back in June.
At the time TSO was looking to raise funds to fast track exploration at El Zorro.
The TSO share price has been on a tear since.
Though the price was pushed down in August when two directors sold sizable chunks of their holdings.
At the time of writing TSO shares are up 12.5% to trade at 18 cents per share.
First look underground at El Zorro
When the first round of drilling results was released last week, there was little movement in the share price.
And it wasn’t for lack of good results.
Maybe the market was hoping for extremely high-grade results?
The kind we’re used to seeing from small-caps recently.
The first round of results showed very broad zones of decent gold mineralisation, including:
- 50m at 0.85 grams of gold per tonne (g/t) from 29.50m, including 63.50m at 1.81g/t from 29.50m
- 54m at 1.69g/t Au from 72m, including 6.70m at 11.57g/t from 118.30m
Today’s results help sure up the large scale potential of the project.
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But the mineralisation is far broader.
- 231m at 0.83g/t from 72m, including 54m at 1.69g/t from 72m
- 76m at 0.93g/t from 75m, including 12m at 1.39g/t from 128m
Gold grades of up to 11.57g/t were also recorded.
Source: Tesoro Resources
This figure gives a visualisation of the extent of the mineralisation now found at El Zorro.
With the potential of the project now a little clearer, TSO plans to double the current drill program to 10,000m.
What’s next for the TSO share price?
The recent results are certainly encouraging for the El Zorro project.
These results could be signs of a much broader resource in the area.
Managing director Zeff Reeves said:
‘The geological model is holding up, with multiple well mineralised faults being identified within a large lower grade halo.’
If we continue to see similar results moving forward, the share price could cement itself past the 20-cent mark.
However, what is mildly concerning is the recent sell-off by two directors.
Typically, directors will buy shares when they think they are undervalued.
And sell when overvalued.
TSO did state the reason for these sell-offs was to fund tax obligations.
The sale of both parcels of shares was worth $411,000 and $141,376 respectively.
Quite large obligations.
Though this is certainly not a deal breaker — just something to be mindful of.
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For The Daily Reckoning Australia