One of the best performers on the Australian share market in 2020 has been the De Grey Mining Limited (ASX: DEG) share price.
Since the start of the year, the gold-focused mineral exploration company’s shares have jumped an incredible 1,645%.
To put that into context, if you had invested $10,000 into its shares at the start of the year, you would have just short of $165,000 today.
Why is the De Grey share price rocketing higher in 2020?
Investors have been scrambling to get hold of the company’s shares this year thanks to a series of positive updates from its Hemi prospect in Western Australia.
Drilling results at the prospect have delivered outstanding results over the last few months and appear to indicate that the company is sitting atop a major resource with the added bonus of having world class infrastructure on its doorstep.
The latter will be a big positive if the prospect becomes operational in the future.
What is the latest news?
Last week its drilling activities revealed further high grades and an expanded footprint at the Aquila Zone within the Hemi prospect.
De Grey Exploration Manager, Phil Tornatora, commented: “The Aquila style gold mineralisation identified in highly altered intrusion 400m to the west is an exciting and significant development as it opens up the overall strike potential of the deposit.”
“The broad high grade mineralisation announced today is particularly encouraging demonstrating the potential to rapidly add to Aquila’s gold endowment,” he added.
Further diamond drilling is coming with the aim of extending Aquila to at least 300 metres below surface along the entire strike of the deposit. Management also notes the potential to extend Aquila a further 400 metres to the west under an interpreted shallow veneer of sediments.
Should you invest?
I’ve been very impressed with its drilling results and I’m confident that De Grey has discovered a real gem.
However, with its market capitalisation now over $1 billion, I think the easy gains are gone. In light of this, I would suggest investors wait until the full resource is known and feasibility studies are undertaken.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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