The De Grey Mining Ltd (ASX: DEG) share price is backtracking today despite announcing 'impressive' infill drilling results at Brolga.
At the time of writing, the gold and mineral exploration company's shares are fetching for $1.35, down 2.88%.
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What were the results?
Investors are dumping De Grey shares regardless of the positive results obtained from its RC drilling campaign.
According to its release, De Grey advised it has identified new resource definition results. These include:
- 193 metres @ 1.7 grams per tonne (g/t) of gold (Au) from 40 metres in HEDD218
- 123 metres @ 1.9g/t Au from 33 metres in HMRC054
- 140.2 metres @ 1.3g/t Au from 35.7 metres in HEDD302
- 136 metres @ 1.2 g/t Au from 38 metres in HMRC055
- 128 metres @ 1.2g/t Au from 94 metres in HMRC065
- 90 metres @ 1.1g/t Au from 106 metres in HMRC138
De Grey stated that the drilling is being conducted as part of the prefeasibility study (PFS) of its Mallina Gold Project in the Pilbara region of Western Australia.
Conducting resource definition drilling allows more of the Brolga resource to be classified as JORC indicated mineralisation.
In turn, this increases the potential production target and ore reserve for the PFS and provides increased confidence in the project's projected cash flow.
Furthermore, De Grey highlighted other higher-grade resource definition results at Brolga, which are as follows:
- 54 metres @ 2.6g/t Au from 45 metres in HEDD300
- 20 metres @ 5.1g/t Au from 212 metres in HMRC131
- 19 metres @ 3.7g/t Au from 36 metres in HMRC139
- 19.3 metres @ 2.5g/t Au from 35.7 metres in HEDD302
- 24.5 metres @ 2.5g/t Au from 91 metres HEDD302
Management commentary
De Grey general manager of exploration Phil Tornatora commented:
These new resource definition drilling results at Brolga, including 193m @ 1.7g/t Au in diamond drill hole HEDD218, successfully demonstrate the continuity of mineralisation within the proposed Brolga Stage 1 starter pit and reduce project risk associated with early production.
Resource extension drilling to the southwest of the proposed Brolga starter pit is in progress.
Exploration drilling continues across both Greater Hemi and Regional areas. Resource definition drilling is nearing completion and rigs will then be targeting further resource extensional and discovery drilling within the Greater Hemi region.
About the De Grey share price
The De Grey share price has accelerated by 37% since this time last year following gold's meteoric price rise on commodity markets.
In particular, the company's shares have shot up around 13% in the past month alone.
On valuation grounds, De Grey commands a market capitalisation of about $1.88 billion, with more than 1.4 billion shares on hand.
