It has been another mad week on the ASX casino. Now Im sharing...

It has been another mad week on the ASX casino. Now Im sharing the same opinion with some analysts, only 30% of people are still doing fundamental trading, the rest is purely hype/technical trading. Those who put money into the gold sectors now are either longterm investors, (because they saw great value are happy to sit tight), or technical traders. Gold has performed very poorly last week and dropped another $40 last friday so the pain might continue into next week. But not many leaves are left on the tree and trapped retailers were mostly out by now I believe. Anyone trying to manipulate the SP at this level are most likely buying selling to themselves. Anyway, the POG had very little to do at the rampage in some gold stocks last week. Let's have a quick look:

1. EMU

• A total of 3700mdrilling on the previous shallow drilling that has confirmed a gold resource of 14koz.
• 9 out of 33 holes drilled had assays worth reporting. Only 1/33 holes is >100g/m.
• As we can see from here the mineralized zone idetified from current drilling is less than 120m strike length. For Monte Cristo the majority of grades are less than 10g/m.

Not only the mineralized area is narrow, to be honest Im not sure how it many oz it might be able to add to the existing 14koz proven by previous drillings, but also they are targeting narrow veins with very high strip ratio.

How the market reacted to this? SP jumped from 5.5c to a intraday high of 14c, a more than 250% increase! Traders then dumped it hard on retailers but SP managed to close the day with a 64% increase.

2. LEX

• Total strike length of 240m
• 22 RC/Diamond holes. 1 great hole with grade of 300g/m, the remaining significant assays are low grade as seen below.

Why only one hole with good grade? Please see the cross section below, it looks like they found a narrow high grade core in a sea of low grade. Again strip ratio would be an issue here.


How the market reacted to this? Shot from 20.5c to an intraday high of 90c. A 440% increase. The SP has been cooling down since then but is still currently at a 300% increase!

3. CWX

• Mineralized area with 260m strike length
• 11 RC holes. One hole (TNRC008) with >100g/m. Assays for 4 other holes, TNRC1, 6, 9, 10, had decent grade. All assays converted to g/m can be seen here
• This is a near surface system (mineralized from 80m) with a high grade zone. However as we can see that both the head grade and the size of the intepreted high grade zone is much less than what TSO has.

How the market reacted to this: rocketed from 21.5c to an intraday high of 52.5c, a 245% increase. SP then closed the week at 34.5c, a 68% jump.

4. TSO

• 6 holes reported. Each hole served a different purpose but ALL hit gold.
• Hole 84 is another >100g/m hole, further confirms and delineates a continuous, wide, strike extensive gold zone in the north east of Ternera: 85.67m @ 1.42g/t Au (121.65 g/m’s)
• Hole 80 extended intepreted high grade zone by another 200m to the South. This 200m increase in strike length is already equal to the total strike length of many other deposits.
• Ternera gold mineralised zone now confirmed by drilling over 950m of strike, 450m wide to over 400m depth and remains open in all directions.
• Ternera gold mineralised surface expression is 1,500m of strike, up to 600m wide and remains open in all directions.
• The cross section has shown very broad high grade core that is near surface (from 5m), super low strip ratio, average grade of this high grade zone is >2.5g/t. Most interestingly, unlike many other deposits, goldmineralization has extended into sedimentary rocks: "Mineralisation occurs in sedimentary rocks and El Zorro Tonalite (EZT), the predominant gold host at Ternera. This indicates the potential for the fault zones to host additional gold mineralisation within multiple rock types at Ternera".

How did the market reacted to this? SP did not move for the whole week! All that I can say is the gold sector has never been this exciting before! Great opportunities arise from times like this! For longterm investors, we just need to pick those presenting great value but got sold down together with the whole sector. For traders, nothing to see here just yet