Materials

Wia hits fresh gold targets at Kokoseb, but investors aren’t having it

Wed 27 Jul 22, 12:41pm (AEST)
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Key Points

  • Wia Gold has announced fresh diamond drill assay results for its project in Namibia
  • Despite this, the company is down -14.8% in trades today to 6.9c
  • Uninspiring grades below 2 grams of gold per tonne may be a factor behind investor flight

Wia Gold (ASX:WIA) is having a day of mixed signals as it announces a batch of thick gold intersections, but sees its share price down -14% in afternoon trade. 

That might not be Wia’s fault, given the ASX200 has been in the red today since the new Australian inflation rate of 6.1% came out this morning. 

Wia’s Kokoseb project in Namibia is the subject of ongoing diamond drilling and a currently underway 20,000m RC drilling campaign. So far, nine RC holes have been completed. Results are not yet available. 

Initial metallurgical testwork results based on earlier core samples are due later this month, though, with three working days left in July, investors might not see results until early August. 

Assay results for another five diamond drill holes on-site are due next month, too, which will conclude the 12-hole run. 

What’s this about grades? 

So far, the only high-grade gold mineralisation detected on-site has been in pockets comprising larger low-mid grade cores. 

Investor information provider Undervalued Equity notes that high grade gold is that over five grams per tonne (5g/t), but with that said, many projects boasting 4g/t grades are also classified as ‘high.’ 

The majority of Kokoseb assay results to date reflects gold grades between 1g/t and under 3g/t. There is a good chance the lack of results boasting grades over 4g/t are disenfranchising smallcap investors looking for the quickest path to high-impact sales. 

With that said, it’s worth noting, however, a strong plus to Kokoseb’s geology that may be getting overlooked: the company has hit multiple thick gold intersections at surface, meaning an open pit mining operation is far more feasible. 

Investors would be wise to keep in mind, though, that results to this end are not yet voluminous enough to confirm open-pit feasibility one way or the other.

A number of results also run to depths of 150m, which would imply a far more expensive mining operation. 

What has Wia found at Kokoseb?

Investor information provider Undervalued Equity notes high gold grades are those over 5g/t. As I like to point out, though, absolute consensus on high grade does not have a fixed definition, and many projects boasting 4g/t results are also widely accepted as high-grade operations.

With that in mind, let's take a look at what Wia is reporting today:

  • 14.1m @ 1.91g/t from 45m depth (including a 5.7m pocket at 3.5g/t)

  • 16.7m @ 1.58g/t from 62m depth

  • 12m @ 1.36g/t from surface

  • 8m @ 1.47g/t from 33m depth

  • 11.5m @ 2.5g/t from 58m depth

 

Despite outperforming the materials index since late June, investor flight from Wia is clearly evident today on the chart (far right). How much of this is to do with Wia, and how much is to do with macro trends?
Despite outperforming the materials index since late June, investor flight from Wia is clearly evident today on the chart (far right). How much of this is to do with Wia, and how much is to do with macro trends?

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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