Bastion Minerals (ASX:BMO) shares are down -7% heading into mid afternoon trade, even as the microcap announces success in its maiden 5,000m scout drilling program onsite its Chilean Capote project acreage.
Assay results announced today, confirming gold, report only on the first 500m of that 5,000m program.
The Capote play is located in the Atacama region which is populated with a number of mining players and which Bastion describes as “mineral rich.”
The current purpose of the company’s first-stage ‘scout’ drill run is to prioritise key target areas at Capote to follow up with more substantial drilling. So far, business as usual for a junior explorer.
Assay results for five of six drillholes have been received, and Bastion today reports two high grade hits of gold.
The reason Bastion can report its assay results so quickly is because it is using laboratories in Chile, and not Australia, where ongoing sector-wide delays impede explorers across the board.
Investors should note, however, the core sections reported today are under 2m in length, and this is likely one factor driving the company to a small sell-off today.
There are two standout results in today’s reported data from five different drillholes at Capote.
Investor information provider Undervalued Equity notes high grade gold is that with grades over five grams of gold per tonne (g/t), but many Australian projects with grades at 4g/t are also accepted as high grade plays.
Bastion today notes:
1.6m @ 9.6g/t at 58.4m depth (CPDH003B)
1.1m @ 3.9g/t at 80.9m depth (CPDH003)
The reported intersections occurred at various stages of larger drill runs down each of the five holes.
The 3.9g/t result occurred between 80.9m and 82m underground, while the more eye-catching 9.6g/t result occurred between 58.4m and 60m depth.
Lower grades were detected near the surface at 10m depth downhole a third target.
While grades above 9g/t are promising, investors should note that at over 50m depth, the company has quite a task ahead of it in developing a mine to access the gold—and that’s assuming high grade gold occurs over a commercially viable area underground.
In short, quite a bit more drilling will need to be undertaken first.
If it’s proven there is a large amount of gold down there, the company will need to spend quite a bit more money on finding a way to get to it in the first place.
The good news: the company has identified new gold bearing structures previously unknown to the geotech team.
“Given we are only partly through the scout program, this is an excellent start to drilling at Capote,” Bastion Minerals executive chairman Ross Landles said.
“There is elevated gold in all structures drilled, particularly encouraging given the scale of the district…we are reporting results here for the first 533m of a 5,000m drill program.”
It’s possible that market pundits have today overlooked the fact Bastion is reporting successful gold hits from the very first part of its maiden drill run.
With results to continue flowing to the market, there is a chance positive interest may accumulate.
Currently, one year returns for Bastion shareholders are down -27% and year to date (YTD) performance is down -50%.
Bastion had $1.5m in cash at the end of June.
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