Microcap rare earths explorer RareX Ltd [ASX:REE] has watched its share price jump 37.50% this morning, on results released from its Trundle project.
Source: Trading View
The results mark the first drill hole completed at the project located in the Macquarie Arc of the Lachlan Fold Belt, in central west NSW.
Drilling was completed by Canadian-listed Kincora Copper Ltd [TSXV:KCC], who acquired a 65% interest in the Trundle project earlier this year.
REE retains a 35% free carry in the project and owns 9.9% of Kincora Copper’s listed equity.
Why the hype?
There’s a couple of factors here playing out to the benefit of the REE share price.
The first; exploration on the project in being led by John Holliday of Newcrest Mining Ltd [ASX:NCM] fame.
Mr Holliday co-discovered NCM’s famous Cadia mine, which produced close to one million ounces of gold and 91,000 tonnes of copper in FY19.
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In the preliminary results released this morning, REE compared the visual mineralisation found at the first drill hole to results first found at NCM’s Cadia mine.
NCM previously owned the Trundle Project through the 1990s and early 2000s, but did not drill past a depth of 200 metres.
Historic drilling has revealed shallow mineralisation of low-grade gold.
KCC and REE have drilled to a depth of 685 metres.
The second factor; the Trundle project is located 30km west of the China Molybdenum Company Limited operated Northparkes copper-gold project — the second largest porphyry mine in Australia.
Trundle sits within the same system as Northparkes, which has a historical production of 5.5 million ounces of gold and 4.5 million tonnes of copper.
So, it’s understandable how some investors could get excited about the Trundle’s prospects.
This morning’s results are very limited and assay results are pending — these are only based on visual interpretation.
Mr Holliday did comment:
‘While early days in our ongoing drilling program, and awaiting assay results, multiple noteworthy positive developments have been achieved… visual results of this hole confirm our exploration model and significantly increases both the scale and prospectivity of Trundle Park, with multiple large targets for follow up.’
Some things to consider
Porphyry deposits, like Northparkes, are unique in that each deposit holds different concentrations of minerals.
Meaning, irrespective of initial high mineralisation, there is no guarantee REE’s deposit will contain the same concentration of gold.
REE said drilling had commenced at a new target approximately 12.5 km north of Trundle Park.
The company said previous drilling has returned metal grades comparable to the peripheral parts of the Northparkes deposits.
So, we could know more about the composition of the porphyry in the coming weeks.
In the interim, make sure you check out our exclusive interview with bestselling author and Wall Street insider, Jim Rickards: ‘The New Case for Gold’. You can read it for free here.
Regards,
Lachlann Tierney,
For The Daily Reckoning Australia
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