Predictive Discovery Ltd (ASX: PDI) shares are catching the eye on Friday with a very strong gain.
At the time of writing, the ASX gold share is up 11% to 24.5 cents.
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Why is this ASX gold share surging?
Investors have been buying this gold developer's shares today after it was revealed that fellow gold miner Perseus Mining Ltd (ASX: PRU) has increased its stake in the company.
According to the release, Perseus has increased its relevant interest in the issued shares of Predictive Discovery to 19.9%.
This compares to its previous stake of 13.82%, which was announced to the market only last month.
Perseus notes that as part of funding the acquisition of this increased stake in Predictive, it has applied the proceeds raised from the unwinding of its previously announced cash settled equity swap position.
And while this increased stake appears to have triggered takeover speculation, Perseus has played this down. It stated that it "has no current intention to acquire control or make a takeover offer for Predictive."
What is Predictive Discovery?
Predictive is an emerging mineral development company focused on the Bankan Gold Project. It is a pre-development project located in Guinea, West Africa.
The Bankan Gold Project has a reported probable ore reserve of 57.7 Mt @ 1.64 g/t gold containing 3.05 million ounces of gold.
Perseus' chair and CEO, Jeff Quartermaine, previously explained why his company was investing in this ASX gold share. He said:
As a deliberate element of our capital management strategy, Perseus continues to assess and, where considered commercially appropriate, deploy our significant reserves of cash and bullion that totalled US$587 million at 30 June 2024, to pursue opportunities that will deliver material growth for our shareholders in coming years.
Predictive's Bankan Gold Project is an attractive gold development project located in a jurisdiction that has an increasing presence in the gold mining industry. We are looking forward to working with the Predictive management team and Board to help realise the potential of the Bankan Gold Project.
But for now, Quartermaine revealed that its main focus will be on its own Nyanzaga Gold Project in Tanzania. He said:
Perseus is currently focused on the development of our Nyanzaga Gold Project in Tanzania which we plan to bring into production by Q1 2027, as well as continuing to successfully operate our three existing mines, Yaouré, Sissingué and Edikan which in FY24 produced a total of 509,977 ounces of gold at a weighted average AISC of US$1,053 per ounce.
