By Dr. Michael Green
Cracking news has just come out from Tectonic Gold concerning the rediscovery of Goldsmith’s Reef where in the past artisanal gold production mined material in excess of 40g/t gold. There seems to be plenty more copper as well. Also, the board has just been able to report impressive assay results for gold and copper from recent drill preparation work at Tectonic’s Specimen Hill Project in Queensland Australia.
The story so far is that Tectonic had already successfully mapped a continuous 4km+ of strike from Main Lodes to Southern Copper; and the last 3 months has seen the team busy on the ground gathering additional data on ground surveying, sampling and assaying.
Over this period a number of independent specialists have been out to the site including Dr Brett Davis who has completed an advanced structural model of Specimen Hill on which the drill targeting will be based. This has been followed by a detailed mineralogical study of the 2018 drilling data to validate the blind porphyry under Main Lodes to help ascertain deeper drill targeting of this discovery.
This latest detailed mapping work has led to the identification of the old working at Goldsmith’s Reef, which was in operation before World War One. Here, high grade veins reporting grades of over 40g/t gold were selectively mined. This is a very exciting prospect as the board have pointed out that modern mining technology would allow large-scale open pit mining which could economically exploit this mineralisation to a much greater depth than was historically possible.
Underground mine face samples from old workings taken were +5.4g/t gold and +1.3% copper. Importantly, underground geological mapping of the veins confirmed the continuity of gold and copper mineralisation that has been mapped on the surface, with high grade mid-point continuity between Main Lodes and Southern Copper.
If that wasn’t enough, a second high grade discovery named Overshoot has been found along strike from Southern Copper, where 2.6% copper was returned from an assay of exposed mineralisation. It has to be said that Tectonic’s methodical approach to infilling data along the corridor from the Main Lodes to Southern Copper has continued to reinforce the company’s expectations of the prospectivity of the area.
This all sets the scene for Tectonic to bring the drill rig back to site to tackle depth testing at the Southern Copper discovery. Following the completion of extensive additional work on validating and targeting the feeder at Main Lodes, that confirmed the blind porphyry discovery, this will be the next target to be drilled after Southern Copper.
It all seemed to have gone a bit quiet at Tectonic for the past few months. However, this latest announcement shows that excellent progress has continued to me made. There is more good news, in that they are now in dry season which brings the promise of sustained field activity, drilling and more news flow over the coming six months.
At the time, Brett Boynton was able to point out that “We have had a busy restart to the 2021 campaign season with a lot of time back on the ground since we demobilised the January drilling program. We are excited to be preparing to drill again with a couple of exciting new discoveries. These were made while conducting detailed mapping on the Main Lodes to Southern Copper strike. This was part of an independent structural modelling with Dr Brett Davis of Olinda Gold Structural Geology Consulting. Dr Davis is an external expert Newcrest used in their assessment of Greatland Gold. Tectonic engaged with Dr Davis to ensure we have the highest calibre validation of our projects to replicate Greatland’s strategy in partnering with a major gold company….”.
This stock was one of our tips for 2021 and this wasn’t a hard choice. Tectonic has a really impressive highly focused Australian high-grade gold portfolio with multi-million-ounce potential projects which are planned to be joint ventured or sold to majors. At this stage, all signs are that the majors are watching as Rio Tinto has already pegged acreage next door to Tectonic’s flagship project, which we believe speaks volumes for its potential.
The company has two large, advanced projects – one of which could be a Mt Morgan (8 million ounces (Moz) gold) lookalike – in a highly prolific gold belt. More than 3Moz is being targeted at each project now that the gold bearing systems have already been identified. Investors benefit from a past £7.5 million spend which has resulted in compelling discoveries and multiple drill ready targets. All the signs are that the company has identified and proven gold bearing systems in a highly prolific area. So, Tectonic is well placed to provide the majors with replacement projects in our view.
There is no doubt that the flagship Specimen Hill project is shaping up to have impressive potential. There is going to be no shortage of news flow over the coming months, with plenty of drilling results to look forward to. All of this data are planned to be used to define a maiden JORC resource, with hopes for an upgraded resource and feasibility studies where the economic value of the gold mining project based on the defined resource will be determined later on in the year. We see the very real prospect of a corporate deal on Specimen Hill before the end of 2021.
We updated our coverage of Tectonic in September 2020 with a Conviction Buy stance and a target price of 5.54p with the shares then standing at 0.35p. Now with the stock trading at 1.20p, we see plenty more to come.
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