MHC (ASX) Ann: Spectacular High Grade Gold Continues at New Bendigo

Originally posted by Maverick7: ↑

Hi Bebs,

There was one exceptional result, but the majority of the results were quite poor. When reading results you need to analyse all the results, not only results which the company chooses to highlight at the top of the report.

For shallow open pit gold deposits generally less than 120m deep, results of 20+ gram metres are generally considered economic. Ie. 30m @ 4.03 = 120 gram metres. If you calculate these for all the other drill results in the report most fall way short of 20 gram metres, which therefore downgrades overall the prospectiveness of the deposit.

Also, the market cap prior to the results was circa 70m+ which was quite high considering their early stage of exploration, which means there was a lot of hope and hype already factored into the share price, and the results needed to be above average to sustain the share price.

I believe the combination of the above factors is the reason for the steep fall in price.

On a positive note, they appear to have other prospects to explore, but it will likely require quite a bit of luck and persistence for the company to regain the market darling status it enjoyed prior to these results.

Hope this helps.

Cheers
Maverick

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Hi Maverick,

You're mostly correct with your point about gold grade per vertical meter. However when companies complete feasibility studies to measure this, they have drill spacings of approx. 10m - 15m

This is nuggety gold so you're bound to get holes that don't carry high grades.
I've designed underground grade contol programs in gold at 10m spacings. Holes next to each other have been polar opposites. One graded at 10g/t over 5m and the other at 1g/t over the same width. There's high and low grade regions in the same mineralised lode.

I agree the announcement wasn't spectacular but for damn sure it was positive.
Its a big step forward in proving continuity in the area, with the mineralisation open in every direction and the potential to infill and define the high grade plunge.

Kell and the team want to push forward as fast as they can because they know they are onto something big.
as I mentioned in a earlier post, getting a structural geologist on board, and maybe (this is only speculative) using the drill results for a new updated scientific paper about the region.
I believe you can't find a better gold specy out there.
This is a tier 1 distinct and will be proven to be so in the near future.

Just lastly, when you read the announcements, Kell uses scientific and geological jargon because he actually understands the Geology and is trying to give investors feedback into what they're seeing on the ground.

It's still early to estimate an inferred resource but I'm sure there's one there.
Could this be the next De gray....... Maybe, its early, but ticking initial boxes.
What I do know is, Kell and the team are the best people to unlock this regions full potential.