At the time of writing, shares of Ausmex Mining Group Ltd [ASX:AMG] are down by 5.88%, to 4.8 cents per share. The company seems to have lost a bit of steam after its two recent announcements. But that doesn’t mean it’s not worth following today.
Why did Ausmex Mining Group Ltd shares do this?
Ausmex Mining Group tapped the copper motherlode at the Trump Mining Lease on Tuesday, sending its share price skyrocketing. I wrote about that drill hole, here. TR17RC07 hit 153 metres, grading 1.02% copper from surface. TR17RC07 also intersected gold and cobalt, which could enhance the economics of the overall project.
Today, the company announced its maiden drill results from the Comstock gold prospect at the Goldern Mile project. The Trump Mining Lease is located to the west of Golden Mile Project. More drilling will resume at Trump once the Golden Mile drilling is finished.
What now for Ausmex Mining Group Ltd?
The company reported the following results at the Comstock gold prospect today:
Source: Ausmex Mining Group
To be frank, while these results look good considering the shallow depth, I am surprised by the market’s reaction.
The two drill holes intersected a lot of barren rock:
Source: Ausmex Mining Group
It’s too early to tell whether this project is special ― there’s not enough data. The company might uncover a shallow resource at the Comstock gold prospect, which could prove lucrative. But, the question remains: how many ounces lay below the ground? Indeed, we can’t yet determine whether this company is onto something.
That said, it’s drilling a number of attractive prospects…
The Comstock mine produced gold, averaging 60 grams per tonne, prior to the Second World War. It’s one of eight historical gold mines across a gold field (1.5km wide x 1.8km) known as ‘The Golden Mile’. Ausmex is targeting seven of these historical mineralised zones in the current drill program. Mining at the Golden Mile prospects only reached a depth of 30 metres below the ground.
Ausmex control eight of the 10 known “gold only” mines in the Cloncurry Mineral Field.
We’re looking at an exciting story in the making ― the drill results to date are encouraging. But it’s still early days for shareholders. The company plans to estimate a resource over the next 6 months at the Mt Freda Complex, which encompasses the Mt Freda Gold Mine (current JORC underway), Golden Mile, Drillers Hut, Canteen and Evening Star tenements.
The bottom line: I find the story interesting and will follow it closely over the coming months. But for the share price to truly take off in this anaemic resources market, the company needs to hit something special which demonstrates that it’s onto a sizeable gold resource.
Resources Analyst, Markets & Money
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