The share price of ROX Resources Ltd [ASX:RXL] is up 9.68% today, trading at 6.8 cents per share.
Thanks to some new exceptionally high-grade gold finds, ROX share price has now broken out of its downwards momentum.
Looking at the chart, the moving averages are now presenting a potential crossover ‘buy’ signal.
The drilling campaign at the Grace prospect at RXL’s Youanmi gold project has now passed its halfway point.
Results thus far have been promising, with the most recent assays returning the best results to date.
Highlights from the latest round of reverse circulation drilling include:
- 13m at 60.49 grams of gold per tonne (g/t) from 177m, including 4m at 191.56g/t from 181m
- 4m at 18.53g/t from 88m
- 3m at 22.67g/t from 10m
- 3m at 10.26g/t from 107m
RXL said that the results extend strike length of mineralised envelope to 700m.
Notice in the figure below how hole RXRC239 helps extend the known mineralisation northward:
Source: ROX Resources
Also note the surrounding planned and pending holes. If they turn up similar results, we could see a similar reaction in the share price.
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Not only has today’s results further identified the extent of the mineralisation at Grace, it has also helped RXL confirm the broader mineralised corridor at the site.
Something that had not been recognised by previous explorers and miners according to RXL.
This is important as greater geological knowledge of the area can assist in more efficient and effective exploration.
Managing Director Alex Passmore had this to say:
‘Mineralisation strike length continues to grow as we conduct step out drilling with impressive grades being encountered. With a combination of infill RC and diamond drilling we are well placed to deliver a strong maiden resource for Grace in due course.’
The more you learn the less you know
Mr Passmore’s statement tells us two things.
One, that the company is confident that they have a significant gold resource at Grace.
Two, that we may not see a resource estimate for quite some time.
Whether you want to credit the skill of the RXL geology team or maybe the geological complexity of the area, it does not matter.
RXL seem to be gradually uncovering the true extent of the gold mineralisation.
And they may not have been expecting something to the scale they currently have.
Which can be a good problem to have. The larger the resource, the more gold you have.
With its newly discovered high-grade structural corridor, RXL will now focus on building confidence in the scale and continuity of this structure.
Gold Road Res The Youanmi gold project already has a resource estimate of 1.2 million ounces, meaning RXL could be sitting on top of a much, much larger resource.
With a market cap of $126 million and a share price of ~7 cents, you could make the argument that RXL has some ‘deep value’.
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