Junior explorers such as E79 Gold Mines, Caprice Resources and Thunderbird Resources have seen a significant spike in their share price when betting on a nearology play near a recent or historical discovery. E79’s share price surged from its February 6 close of 1.9c to hit a high of 5.4c on February 19 in the two weeks after a neighbour announced a greenfields gold discovery.
Zeroing in on a recent or historic mineral discovery and grabbing whatever prospective nearby ground you can lay your hands on – that’s nearology.
Companies can benefit from nearology when a significant discovery is made, especially if they hold land that directly borders or is near the discovery.
It can be an appealing play for many junior explorers, investors and market punters alike, because it may increase the likelihood of an exploration project’s success.
Many junior explorers also witness a significant spike in their share price when betting on a nearology play near a recent or historical discovery, which can turn into a meaningful upward share price trend.
An eye-watering discovery will stir fellow juniors’ dreams of achieving a repeat – and it makes for a good hunting ground for companies searching for a new project to get stuck into.
Think back to Sirius Resources’ 2012 ground-breaking Nova nickel-copper discovery in Western Australia’s Albany-Fraser Orogen, which sent the company’s share price to the moon and started a stampede for nearby ground as everybody wanted in on the region’s next potentially huge find.
Or look at gold junior E79 Gold Mines, whose share price surged from its close on February 6 of 1.9 cents to hit a high of 5.4c on February 19 in the two weeks after its neighbour announced a huge greenfields gold discovery.
Nearology is proving to be a viable option for junior explorers, such as E79 or fellow ASX-listed juniors Caprice Resources or Thunderbird Resources, to reduce the risks of exploration by pursuing tenements near known mineral discoveries, often along the same fault line, fracture or fold.
It may translate into a higher probability of encountering an economic level of mineralisation and allow a company to strike a deal to use any established infrastructure available at an existing nearby operation, such as processing operations, at a fraction of the cost of establishing it themselves.
E79 Gold Mines’ shares a boundary with Kalgoorlie Gold Mining’s Pinjin project, near Kalgoorlie where, on February 7, KalGold revealed to the market it had discovered a new gold zone at its Lighthorse deposit.
E79 is now gearing up at high speed to drill a series of high-priority targets close to KalGold’s Lighthorse discovery.
E79’s Laverton South project’s ground is only 40m away from KalGold’s recent 8-metre hit at 2.29 grams per tonne (g/t) gold 40m at Lighthouse and 500m over the fence from the company’s impressive 17m stretch running 4.81g/t gold.
E79 project area consists of 272 square kilometres in the southern portion of the Laverton Tectonic zone and the company believes the same structural trends, host stratigraphy and drill targets strike towards its prospective ground, where no drilling has been completed so far.
Both projects sit in the renowned zone, within WA’s gold producing Archean Yilgarn Craton, a prolific region for discovering gold. The area is about 130 kilometres east northeast of the famous gold mining town of Kalgoorlie, estimated to have kicked up 30 million ounces of gold over the years for those who have prodded and probed its lucrative ground.
The market also screamed nearology when Caprice Resources picked up a project that revived familiar memories of WA1 Resources’ massive success story in another exciting WA exploration region.
WA1 had a series of market-grabbing niobium drill hits at its Luni deposit in the West Arunta region that sent tongues wagging and the company’s share price skyrocketing from 12c in October 2022 to a seemingly ridiculous $23.20 in May last year.
The move represented a staggering return of 19,233 per cent and lifted the company’s market capitalisation last year to more than $1 billion.
Caprice Resources revealed on May 9 that it had signed a binding option agreement to pick up a 90 per cent share in the Bantam gold project in WA’s West Arunta region, on the edge of the northern Goldfields near the Gibson Desert.
Bantam covers 1470 square kilometres and has one tenement with a granted exploration licence and three other licences with pending applications.
It also shares a 30km-long border with WA1 Resources’ West Arunta project, which contains the world-class Luni niobium-rare earths discovery.
Caprice’s shares leapt from 2.9c to touch 4c on the day of its Bantam project announcement, with a robust 34.1 million shares changing hands. The share price began drifting back to below 3c, but when the acquisition was confirmed completed on July 1, it sent the price northwards again, touching 4.6c on July 12 on solid trading volumes across the ensuing two weeks.
Impressive drill results at WA1’s Luni find include 7m at a mammoth 10 per cent total rare earth oxides (TREO) from 58m, with niobium hits going 3m at 4 per cent from 28m, 73m at 0.8 per cent from 57m and 7m at 3.6 per cent from 58m.
The Luni discovery has sparked the interest of many junior explorers in the West Arunta region and Caprice is the latest to join the flock, with multiple targets at Bantam showing similar features to those found next door at WA1’s tenements.
Larvotto Resources was one of last year’s market success stories and its share price gained significantly after news it had secured the Hillgrove gold and antimony project in New South Wales on Christmas Eve, 2023.
The company’s share price sat at about 7c when it acquired the project, which is 23km east of Armidale in northern NSW.
The 7.226mt resource graded 4.5g/t gold and 1.2 per cent antimony for 6.1g/t gold-equivalent across a stellar resource of more than 1 million ounces of gold and 90,000t of antimony.
When China announced on August 16 last year that it would impose export restrictions on antimony products, Larvotto’s share price took off on a stunning run, culminating in a peak of 93c on February 11.
Thunderbird Resources found itself briefly in Larvotto’s slipstream when it disclosed it also was getting into the antimony business by acquiring a highly prospective exploration portfolio of landholdings that were contiguous with or encircled Larvotto’s Hillgrove ground.
The 488-square-kilometre package included samples grading up to 18.2 per cent antimony and 76g/t of gold.
Management says the geological structures at Hillgrove hosting the valuable deposits potentially extend northwest into Thunderbird’s newly acquired ground.
The company’s shares spiked hard on November 13 after the disclosure, running from a 1.7c close the previous day to peak at 2.9c on an impressive turnover of more than 34m shares.
Pursuing nearology has proven to be a shrewd business move for many companies in recent times, with share price spikes often leading to raising capital at higher prices to generate the cash needed for exploration programs.
There is every likelihood that there will be plenty more eye-popping discoveries in the future to set off further nearology plays.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
