Arkle Resources reported on Friday afternoon some significant drilling results from hole 7 on its 100% owned Mine River project in Wicklow/Wexford, Ireland.
Hole 7 showed gold-bearing zones intercepted at several levels, including a bonanza style grade of 51.6 g/t over 0.5 metres at a depth of 37.5 metres, within a wider 2.5-metre intercept grading 12.13 g/t. We also learnt that hole 6 did not return any grades of economic interest.
The management is encouraged from visual observations of the drill core from holes 8 and 9, for which the assay results are awaited back from the lab.
Following these excellent results, a step-out hole is being drilled immediately on an untested gold soil anomaly (Anomaly A) and plans are being formulated to drill two step-out holes to the east of hole 7 and to conduct trench work on two anomalies to the south of Tombreen West.
Comment and Recommendation.
Drilling vein style gold mineralisation can prove a hit and miss business for exploration prospectors. Arkle appears to have shown from Friday’s results that it can make several hits from just one hole, with gold mineralisation intersected within multiple sections on drill hole 7, including an astonishing bonanza style grade of 51.6 g/t gold.
We therefore eagerly await assay results from holes 8 and 9 in the coming weeks, which the management tentatively alluded to in Friday’s announcement could also return positive results, given the initial visual drill core observations. We are also encouraged that Arkle has extended its drilling and exploration campaign to understand the extent of this expanding gold zone.
Despite the rise in the shares on Friday afternoon, the shares are still trading near their 12-month lows, with a current market cap of around £3m, which barely reflects the project value of the Group’s lead/zinc Stonepark interest, let alone the potential upside achievable on its gold exploration interests such as Mine River. With these thoughts in mind and potential for similar announcements in the very near term, we recommend the shares as a ‘Buy’.
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*First Equity Limited act as Joint Broker to the Company.
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