Newcrest Mining Ltd [ASX:NCM] shares are down 5.20% at time of writing after withdrawing from the Euro Gold Project.
The project is located in the Tanami region in Northern Territory.
It covers 3,478 square kilometres and runs along the Trans-Tanami Trend, close to Newmont’s Callie gold mine, as you can see below:
Prodigy keeps Euro Gold Project
In July 2018, Newcrest went into a farm-in agreement with Prodigy. Newmont agreed to fund up to $12 million over seven years to get a 75% stake in the project.
Most of the exploration activity at Euro has included soil sampling and little drilling, with drilling centred in the Dune prospect. Some of the results from the reverse circulation drilling included: 2m @ 12 g/t Au from 105 m, 8m @1.9 g/t Au from 94m and 36m @0.6 g/t Au from 104m, including 20m @ 0.95 g/t Au from 105m.
But according to Prodigy, the project ran into some delays to access the land along with the pandemic.
Since Newcrest never spent the $6 million in four years required to reach stage 1 to get a 51% interest, Prodigy gets to keep 100% of the project.
‘A review of these work programs is currently underway and will be used to determine opportunities for follow-up exploration. Further details will be provided in due course.’
What could happen next?
At time of writing, Newcrest Mining shares are trading at $29.38, around 5% lower. Prodigy gold shares have also dropped further, close to 9%.
Yet the share price drops could have to do with gold prices falling after Pfizer released some good news in regards to a vaccine against COVID-19.
‘The experimental shot, developed by American drugmaker Pfizer Inc. and German biotechnology firm BioNTech SE, appears more than 90% effective in stopping SARS-CoV-2 infections.’ Bloomberg reports today.
Many of our Aussie miners are down today after gold dropped close to 4% and trading at US$1,875 an ounce at time of writing.
But with the virus locking down Europe, surging in the US and the Fed looking at more stimulus, the case for gold remains very relevant.
One way to get exposure to gold is through gold stocks. Check out Rum Rebellion Editor, Greg Canavan’s free guide on ‘How to Pick Winning Gold Stocks’.