Galileo’s soaring share price shows exploration success outweighs broader market woes every day
The junior explorers have been down in the mouth of late as the big switch to risk-off in equity markets takes its toll on their share prices. Given the on-going supportive backdrop of historically high commodity prices, the painful sell-off in the juniors has been something to behold.But among the gloom, the explorers can be relied on to serve up a reminder every now and then that impressive exploration results will win out over broader market weakness each and every time.
There was a prime example of that during the week from Galileo (GAL), the junior explorer backed by renowned “prospector” Mark Creasy and lithium/nickel producer IGO. It has notched up an impressive palladium -platinum discovery, of all things, next to the gold town of Norseman in WA, of all places.
The discovery hole at the Callisto prospect returned a 33m hit grading 2g/t 3E (palladium, platinum and gold) along with copper and nickel values from a depth of 144m.
Wednesday’s announcement put a rocket under Galileo’s share price, with the 20c stock closing 217% higher at 63.5c. Some profit taking in the four-year-old ASX stock on Thursday brought the price back to 49c for a still impressive gain of 145%.
Despite the share price retreat, enthusiasm for the find remains hot. A lot of that has to do with veteran geologist Brad Underwood, Galileo’s MD, who spent eight years as general manager of Creasy’s privately funded exploration effort at Norseman and the Fraser Range before Galileo was listed. He is a straight talker and has a way of distilling the story into something we can all understand, with all of the right “ifs and buts” that you would expect in an early-stage exploration success story. That came through on an investor webinar he hosted on Thursday morning.
Making the point that the hidden Callisto find – it starts at about 120m with no outcrop and is flat-lying – is no overnight success, Underwood said the company has had palladium and platinum sniffs over the past two years "but now they have been translated into a discovery,”
“We talk about it being a discovery because it is a mineralised system that looks to be capable of hosting economic grades of palladium and platinum.
We’ve put down six drill holes (assays pending from five of the holes, with the hole assayed prioritised based because it was visually the more interesting) and we believe it is a genuine discovery.
The next steps for us are to identify how big a resource exists at that location and all the other factors that go into a prospective mining operation.
What is very important to understand though is the potential scale of these targets.
We have over 5km of prospective strike length (identified from magnetics and aircore drilling).
So potentially at least, it could be a significant find.”
While there was discussion around comparisons with South Africa’s fabled PGE deposits, and other remote sensing techniques that might be deployed at the find, Underwood was keeping things simple:
.“We have got a discovery intersection.
We have a fairly good idea which way it is running through the earth.
We are high risk by nature being an exploration company, and we’re just going to go out and drill (from mid-June).”
It was refreshing stuff, with the hit at Castillo itself giving the exploration sector a confidence boost just when one is needed.Importantly, Galileo is well funded for the drilling push. At last count it had $8m in the till.
GAL Price at posting:
49.0¢ Sentiment: Buy Disclosure: Held
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