LCL delivers 52m at 3.65g/tonne gold - “spectacular” result...

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0	LCL delivers 52m at 3.65g/tonne gold - “spectacular” result

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0	Column 1 0 Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 9,755,814 LCL shares and staff own 14,285 LCL shares at the time of publishing this article. The Company has been engaged by LCL to share our commentary on the progress of our Investment in LCL over time.

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52m at 3.65g/t gold assay on hole 4. This is the highlight drill from Los Cerros (ASX: LCL)’s latest drill results - and we still have over a dozen more holes to come. LCL also announced visuals on hole 5 (assays pending) - which delivered the widest zone of upper limestone skarn (where the gold is found) AND visible gold. We are eagerly waiting for the assays on hole 5 expected in a couple of weeks. LCL says that the “spectacular” assay on hole 4 combined with the visuals on hole 5 has prompted them to “re-assess the potential” of this project:

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We take this to mean that the remaining 13 drill holes in this campaign should be very interesting if taking into account today’s new data. Based on this exciting new result in hole 4 and the pending assays on hole 5, we have decided to start tracking this exploration campaign in 3D going forward. It’s still early with only 5 holes drilled and a couple of historical holes, but it’s a good start point for us to track how each next drill result will add to the mineralisation body:

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So what does “52m at 3.65 g/t gold” really even mean? If you are a novice gold investor, it can be hard to get your head around what is a great drill result, and what is an average drill result. One way to think of LCL’s result today is half a soccer pitch of commercial grade gold, for one hole. Another way to compare drill results, which applies across any project or company is to multiply the two headline numbers together. The result is a number called “gram metres” - so for LCL, 52 x 3.65 = 189.5 gram metres. This number combines the thickness of the intercept and the gold grade. The higher the gram metres, the stronger the result.Generally, drill intercepts over 200 gram metres could be called “company making” results - but ideally the company really has to deliver multiple hits of this size. LCL hit gold in every hole of the current batch of results, and today's hole 4 results and hole 5 visuals have prompted LCL to “re-assess the potential” of the mineralisation. We think this means LCL might have underestimated the extent of gold on its hands here. Today’s results also come as momentum in the gold sector is starting to pick up - in short - it's a great time to be exploring for gold, and delivering large intercepts on potential new discoveries. The gold price is trading near its all time highs at ~US$1,990/ounce and a large amount of capital is sloshing around at the upper end of the market. Majors are using the opportunity to take out companies with new and developing discoveries AND/OR merge together to create industry behemoths. The highest profile takeover being Newmont’s US$19BN takeover bid for one of Australia’s largest gold companies Newcrest. Newcrest already has one operating mine (producing >700k ounces of gold/annum) and a development-ready gold-copper mine (with a resource of 28m ounces of gold and 13.7 mt of copper) project in Papua New Guinea (PNG). Once the merger is complete, Newmont has committed to increasing its presence in PNG - this includes establishing “in-country offices” in the country. Which we hope translates to Newmont scouring around for new local discoveries… For the major gold producers, it is all about consolidating projects and becoming ‘scale monsters’ with projects that have multi-million-ounce potential. LCL’s hits today in PNG are a very good first start - its early days, but it's indicative of the type of drill results that come from projects that go on to make up multi million ounce discoveries. Next, we want to see the assay results from drillhole 5 where LCL has hit visible gold over some of its thickest intercepts to date. If hole 5 comes in even remotely close to the grades/thickness we saw today, then it will imply a ~165m extension in mineralisation to the north at what are very high grades.