The mining sector may be among the top performers in FY19 but someone forget to invite Independence Group NL (ASX: IGO) to the party with the nickel and gold producer lagging the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) index over the past 12 months.
But the Independence Group share price got a reprieve as it jumped nearly 2% to $4.81 this morning after it released some positive exploration results.
It's a small win as the stock is still down close to 8% over the year when the OZ Minerals Limited (ASX: OZL) share price is up 9%, the BHP Group Ltd (ASX: BHP) share price is up 24% and Newcrest Mining Limited (ASX: NCM) share price is up an impressive 45% over the same period.
Gold could revive Independence Group's fortunes
This is partly explained by the fact that iron ore, copper and gold have been in the headlines. While Independence Group does mine gold at its Tropicana project, it only owns 30% of the joint venture. Nickel is a bigger driver of the IGO share price and the outlook for the commodity is more convoluted.
On that front, today's results by at the miner's JV Thunderstorm gold project in the Fraser Range is welcomed news.
Independence Group, which owns 70% of Thunderstorm and is the project manager, said that it had struck significant high-grade gold mineralisation in a large-scale palaeo-drainage system and underlying basement.
Thunderstorm drilling results
The drilling results from Themis Prospect showed 25 meters at 2.42 grams per tonne of gold from 42 meters, including 5 meters at 10.85 grams per tonne from 49 meters, while the Pion Prospect returned 4 meters at 3.8 grams per tonne.
Rumble Resources Ltd (ASX: RTR) owns 30% of the project and it considers the Themis Prospect gold mineralisation as the most significant gold intercept in the Fraser Range in recent years outside of the Tropicana gold system.
The results are encouraging but it's too early to pop the champagne as infill drilling needs to be completed to get a more definitive read on the size and quality of the gold prospect.
Foolish takeaway
Nonetheless, this is a good development for Independence Group given heightened interest in the gold price as central banks around the world are poised to cut interest rates and maybe even embark on quantitative easing (a positive development for the precious metal).
Independence Group could have a chance to play catch-up with the rest of the sector in FY20.
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