Mt Pleasant-based gold junior Alloy Resources is up 28.6 per cent today after a find at its Horse Well joint venture with Doray Minerals.
Doray said the deposit was high grade, at around 2.6 grams per tonne.
In May, the two companies signed a farm-in agreement for the location in the north-east Yilgarn of Western Australia, giving Doray the ability to earn up to 80 per cent of joint venture’s proceeds.
To successfully reach this threshold, Doray must spend $4 million over three years.
Doray managaing director Allan Kelly said the results confirmed the company's belief the project could contain economic gold mineralisation.
Shares in Alloy were at 0.9 cents each at the time of writing, while Doray was up 7.3 per cent to 29.5 cents per share.
Doray was hit by a $50 million impairment in August, due to the falling gold price, and the company’s share price has fallen more than 50 per cent in the ensuing three months.
It operates the Andy Well gold mine, near Meekatharra, and recently produced its 100,000th ounce of gold, but faces increasing costs as the mine ages.