One of the best performers on the Australian share market on Thursday has been the De Grey Mining Limited (ASX: DEG) share price.
The gold-focused mineral exploration company’s shares more than doubled in value today with a 106% gain to 9.5 cents.
Why did the De Grey share price rocket higher?
Investors were scrambling to get hold of the company’s shares after it revealed a potential major discovery at its Hemi prospect.
According to the release, aircore drilling at the newly discovered Hemi prospect has delivered outstanding initial results.
The company’s Technical Director, Andy Beckwith, appeared to be very excited with the drilling results.
He said: “For an exploration geologist, these results are both satisfying and exciting. Hemi’s shallow high grade gold zones provide an excellent opportunity to increase resources and further derisk our path to production.”
Mr Beckwith explained: “The individual assays down hole are very robust creating solid high grade gold zones over considerable thicknesses which we expect to continue at greater depth. On Section A, drilling has defined a subvertical to south dipping 30m wide gold zone hosted in sediments. Section B shows a potential +60m wide gold zone in an intrusive with drilling yet to be completed below the oxide zone.”
What does this mean?
De Grey’s technical director believes that these two zones are likely to be connected. This could mean that the company is sitting on top of a lucrative asset.
“We currently interpret that the two mineralised zones are structurally related, suggesting we could be drilling a major new gold discovery.”
The company will now push ahead with further aircore drilling in order to define the lateral extent, orientation and potential scale of the mineralised system.
In addition, follow-up RC and diamond drilling activities will commence shortly with a view to establishing an initial inferred resource.
Elsewhere in the sector today, the Evolution Mining Ltd (ASX: EVN) share price and the Northern Star Resources Ltd (ASX: NST) share price both pushed 0.5% higher despite a touch of weakness in the gold price.
The post Why the De Grey Mining share price rocketed 106% higher today appeared first on Motley Fool Australia.
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