Why is the Tesoro Resources Share Price Down with Thick Gold Find?
Chile-focused gold explorer Tesoro Resources Ltd [ASX:TSO] is trading lower today despite posting new gold intercepts more than 220 metres wide.
TSO shares rocketed up at the beginning of the month, climbing 31% in one day thanks to some unusually high gold grades found at its El Zorro project.
Despite the big find, TSO shares have been trending downwards since hitting their 52-week high back in mid-October.
At time of writing the TSO share price is down 3.03% or 1-cent to trade at 32 cents per share.
What’s happened at El Zorro?
Today, TSO announced it had received assays for six drill holes at El Zorro, which add significant scale to the mineralised zone at the Ternera prospect.
The prospect has now increased by 150 metres to the northeast and 100 metres to the southeast.
Highlights show broad mineralised gold zones with high-grade results being returned from multiple mineralised fault zones:
- 00m at 0.95 grams of gold per tonne (g/t) from 249.00m, including 6.00m at 4.68g/t from 258.00m and 1.00m at 27.60g/t from 260.00m
- 30m at 0.72g/t from 7.70m, including 23.00m at 2.04g/t from 64.00m
- 20m at 0.62g/t from 20.00m, including 74.00m at 1.05g/t from 48.00m
- 00m at 1.13 g/t from 274.00m, including 42.00m at 1.97g/t from 279.00m
With the latest results, mineralisation at Ternera is now confirmed over an area of 700m x 800m from surface to over 350 metres depth, and remains open in all directions.
So, why has the share price sunk?
One reason might be the gold price, which has cooled overnight.
For low-grade, high-tonnage projects like El Zorro, a strong gold price will be critical to favourable mine economics.
Also consider this: Today’s results do not tell us much more than we already know.
We already have a good idea of the scale at El Zorro; though today’s results are nice they aren’t as good as what we saw earlier in the month.
Tesoro Resources share price looking rocky?
In my opinion, TSO have a nice-looking project in EL Zorro and have done some good work with exploration thus far.
The recent decline in the share price could be due to broader economic factors, rather than disappointment surrounding El Zorro.
TSO said the results have identified areas, which warrant additional infill drilling and will significantly increase the size of the current drilling program.
The explorer is currently drilling 24 hours per day with two drill rigs on site and is planning to deploy additional drill rigs in early 2021 to rapidly define the Ternera deposit.
So, plenty to watch out for from TSO.
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For The Daily Reckoning Australia