Why Predictive Discovery’s Share Price Drop Isn’t Bad News (ASX:PDI)

Why Predictive Discovery’s Share Price Drop Isn’t Bad News (ASX:PDI)

The Predictive Discovery Ltd [ASX:PDI] share price has opened lower today on the back of new results from its Bankan gold project in Guinea.

Shares are fractionally lower, dropping 0.2 cents or 2.78% to trade at 7 cents per share.

The market has failed to respond to news from Bankan, even as PDI continues to progress its exploration.

Shares have tracked sideways at a resistance level of 8 cents for the past few months.

Although the company looks to have gained downwards momentum in recent weeks.

ASX PDI Share Price Chart - Predictive Discovery

Source: Tradingview

A possible explanation for today’s share price drop could be the because of a weaker gold price.

Gold in USD terms sunk 1.23% overnight.

Other ASX gold stocks are also trading lower today despite the broader index lifting.

Bankan teases potential

The latest drilling results at Bankan has now extended the footprint of the high-grade gold mineralisation to 1.6km.

PDI also believes there is a possibility of locating a similar gold zone running parallel to the southwest of their initial target.

Predictive Discovery Bankan Gold Cross Section

Source: Predictive Discovery

Initial testing from the area to the southwest have provided the following highlights:

  • 16m at 3.9 grams of gold per tonne (g/t), including 4m at 9.7g/t
  • 16m at 1.5g/t
  • 16m at 0.8g/t, including 8m at 1.5g/t

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Further drilling results (seen in the top of the above figure) also demonstrate average- to high-grade mineralisation.

Managing Director Paul Roberts had this to say:

The new results on the western edge of the grid south-west of the 1.6km long NE Bankan zone have highlighted potential for more north-south orientated NE Bankan-style/Bankan Creek-style gold mineralisation between the two prospects, particularly as the gold values in the two best holes (KKOAU624 and KKOAU714) show an even gold distribution from 4m to the end of hole, similar to what we have already observed at NE Bankan, offering potential to discover comparable primary gold mineralisation at depth.

Is Bankan underperforming?

It’s a question some investors could be asking themselves?

Back in April the share price rocketed when PDI reported gold grades at Bankan of over 25g/t.

Results since then have failed to record such high grades.

Seemingly, the potential to uncover another similar gold zone isn’t cutting it for investors.

Today’s results are interesting, for sure.

But we haven’t been given much more than we already knew previously.

PDI said they will begin testing 300m at NE Bankan in the Saman permit in October.

Though drilling will begin testing areas west of the new gold mineralised holes SW of NE Bankan.

In my book, we may not see a dramatic share price movement from PDI until we get a better picture of the western zone and what lies further north.

In the meantime, be sure to read up about the looming ASX gold stock bull run. Our resident gold expert, Shae Russell, is predicting Australia will become the next gold epicentre, knocking China off the top spot. In her report she details how this might cause a huge spike in Aussie gold stocks. Get your free copy here.

Kind regards,

Lachlann Tierney

For The Daily Reckoning Australia