New lister Coolabah has early-stage success with gold rockchip results at Gunpowder Creek

Coolabah Metals (ASX:CBH) has reported early-stage success in its exploration activities at its QLD Gunpowder Creek gold project located some 45km northwest of Mt. Isa. 

While rock chip gold grades are often anomalously high, and drilling will be required to ascertain the true nature of gold grades in underground deposits, the discovery of the high-grade rock chip results does give the company a promising indication of where to drill. 

Shareholders and investors will just need to wait for drilling assay results to come back further down the line, but it’s worth noting the samples come from an area that previously has not been drilled. 

The Gunpowder Creek acreage envelopes historic gold workings in the area under permit EPM27733. 251 samples were collected during fieldwork of the historic workings in question. 

However, of those 251 samples, only 11 came back positive for gold. 

What kind of grades? 

Investor information provider Undervalued Equity classifies high-grade gold as that in concentrations over five grams of gold per tonne of ore (5g/t). 

Today, the company unveils three high-grade rock chip samples in three samples: 

• 21.6g/t gold 

• 18.5g/t gold 

• 13.2g/t gold 

The positive samples came from a region on-site located nearby the geologically eye-catching May Downs fault, which was previously the target of former operators on-site. 

Ultimately, Coolabah says the results are most valuable in that they give the company’s geotech team a place to start drilling. Former activities on-site reflect a 5km strike length, so there’s a good chance that the company may sniff out pockets of untapped gold, depending on the extensiveness of former exploration. 

Drilling as soon as practical 

“I’m pleased to report high-grade rock chip samples returning grades up to 21.6g/t,” Coolabah MD Cameron Provost said. 

“The results are situated in and around the historic workings of our Gunpowder Creek project.” 

“These findings deliver targets for our RC drilling campaign, which will commence as soon as practicable.” 

A surface look at performance 

Coolabah is, by any yardstick, firmly a microcap with a market capitalisation of $4.7m. 

The company is ranked 851 of 914 constituents in the materials sector. 

Year to date performance is down -30%, after Coolabah listed in late July at 16c. The company raised $6m in its IPO.

The company’s share price hit an all time high (so far) of 17c a week later in early August; today, the shares are worth 14c. Worth considering is that the company chose a fairly rocky time to start trading on the Oz bourse, and that risk-off sentiment will likely define its performance for at least the next few months. 

Because of the timing of listing, Coolabah has not yet issued a quarterly financial report, and so it is unclear how much to expect the RC drilling campaign to reflect in opex costs. 

A look at Coolabah Metals' charts shows the company has not been able to garner much enthusiasm from the market just yet