Amigos, we've made it through another week and Covid seems to less of a threat to Oz at the moment. Mining is our best sector IMO. For GRL there hasn't been much to talk about, but gold is creeping higher and that is good news for Ozzie gold explorers like GRL. Here I'm pinching some slides from a recent presentation by Kingston (KSN). I think the information is relevant to GRL (Note I don't have shares in Kingston, so not trying to cross-promote it or any other company.) I've copied two graphs and one table from KSN's presentation.
The first graph shows the enterprise value per oz of gold. So for GRL it would be Marketcap / oz = $10 million / 0.4 million oz = $25 /oz. If we were to plot GRL's value of $25 /oz on the graph we would see that GRL is at the low level (ie cheap share price). The second graph shows the gold resource (in kilo oz). If we were to plot GRL's value of 430 koz on the chart we would see that GRL is at the lowish level (small resource). But we could argue that GRL has only existed for 6 months, while the peers are established gold companies. The Table ranks the top 25 gold companies in terms of their gold deposit - Newcrest's Lihir mine is ranked #1 with a resource of 50 million oz @ 2.3g/ton, and Cadia is next at 38 million oz @ 0.37 g/ton. (Apologies because the table didn't copy too well.) If we compare the top 25 gold companies, we can see that the grades are generally in the range of 0.4 g/ton to 2.3 g/ton.
Conclusion: GRL's resource is 0.43 million oz @ 0.4 g/ton, but its exploration could have exciting upside. For example, the recent RC drilling at Mt Aubrey found evidence of oxidised supergene-enriched gold as well as extension at depth of fresh mineralisation. Currently Mt Aubery has only 0.06 million oz @ 1.61 g/ton, but the supergene gold has a much higher grade (drill hole MAGR008 found 6 m at 7 g/ton from only 30m). The GRL announcement states that: "GRL intend to investigate this supergene zone further by way of a revised resource estimate taking into account the recently acquired drilling information and also all available historic data pertaining to the strike extensions of this domain." They are hoping that the supergene layer will extend over a large area. Also they found evidence that there is mineralisation in aeas beyond the old pits: "Hole MAGRC0011 intersected a 28 meter wide mineralised enveloped from 60m down hole (including a 16 meter wide intersection at 1.20g/t Au from 72m down hole). This intersection in fresh ore opens the potential for extensions to mineralisation away from the historic mine at depth." They finish off by saying that a new resource estimate will be made after the next drilling program. "Near term exploration will focus on potential extensions to shallow supergene mineralisation discovered in MAGRC0008 and looking for extensions to the mineralisation discovered at depth close to the basalt/sediment contact in MAGRC0011."
