De Grey Mining share price plunges 5% despite announcing “excellent” gold recoveries

Today, the De Grey Mining Limited (ASX: DEG) share price is down 5.76% to $0.87, despite a positive announcement from the miner revealing high gold recoveries at its Hemi site.

What was in the announcement?

The announcement detailed positive metallurgical testing of the composites from two diamond drill holes at the company’s Hemi site. De Grey used two processes to extract gold from the composites, one which used a conventional carbon in leach method and one which used a pressure oxidation method.

The processes were focused on the Brolga section of the company’s Hemi site. The average grade of all samples at Brolga was 1.5 grams of gold per tonne.

The overall gold recovery from the two metallurgical processes combined was 96.3%, however, the company still has three additional composites which are still undergoing testing. The grade of the composite tested was 2.62 grams of gold per tonne.

Commenting on the result, De Grey managing director Glenn Jardine said:

The gold recovery achieved in the initial metallurgical testwork of oxide, transition and fresh mineralisation at Brolga is very encouraging. The testwork significantly de-risks the potential development of Hemi as a Tier 1 gold project in a Tier 1 jurisdiction. The testwork flowsheet used for Hemi can also be applied to De Grey’s other regional resources in the Mallina Basin.

Hemi is a growing resource and contains a combination of oxide, transitional and fresh sulphide mineralisation. We will continue to increase our understanding of the scale and metallurgical properties of each of these domains across the deposit with ongoing testwork.

Jardine also highlighted that the company’s Hemi mine location – which is situated 60 kilometres from Port Hedland and along major transport, gas and power corridors – is a major advantage for a Tier 1 gold resource project.

About the DeGrey Mining share price

De Grey Mining is a West Australian-based miner that conducts exploration and development activities for gold and base metals.

In June, De Grey announced it had expanded its footprint at Hemi with gold discovered at grades of up to 10.2 grams of gold per tonne. It also announced a near surface gold discovery in the Aquila zone of its Hemi site, with further drilling currently underway.

In April, De Grey Mining raised $31.2 million at $0.28 cents per share.

At the end of the March quarter, the company’s cash balance increased by $1,973,000 to $9,919,000. The company spent $2,668,000 on exploration activities in the March quarter. 

The DeGrey Mining share price is up 2,130% from its 52 week low of $0.039 cents. It has risen 1,640% since the beginning of January, and 1,081% since this time last year.

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Motley Fool contributor Chris Chitty 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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