Why is the De Grey share price rushing higher on Thursday?

The De Grey Mining Limited (ASX: DEG) share price is in the green today. The explorer this morning posted prefeasibility study outcomes for its Mallina gold project in Western Australia.

Shares of De Grey Mining currently trade for 94.5 cents, up 2.72%, after peaking nearly 6% in early morning trade.

Meanwhile, the S&P/ASX 200 Materials Index (ASX: XMJ) is also off to a good start this morning, up 1.45%.

Let’s look at the highlights of the ASX gold miner’s study.

Prefeasibility study outcomes

The prefeasibility study followed a scoping study completed last year for its key financial outcomes and assumptions. The prefeasibility study upgraded these ratios significantly.

The company announced:

• Life of mine up to 13.6 years from 10 years
• Average processed grade up to 1.6 g/t Au from 1.4 g/t Au
• Ore tonnes mined up to 136 metric tonnes from 100 metric tonnes
• Recovered gold up to 6.4 million ounces from 4.3 million ounces
• EBITDA for the life of mine up to $7.1 billion from $4.8 billion
• Total pre-production capital costs up to $1.05 billion from $893 million

De Grey also announced that its maiden Hemi Reserve has 5.1 million ounces of gold at a grade of 1.5g/t Au, which it says is “one of the largest and highest grade maiden reserves in recent decades”.

De Grey managing director and CEO Glenn Jardine said:

Total production has increased by nearly 50% from the scoping study to 6.4Moz with the annual gold production rate increasing by around 25% to 540,0000zpa over the first ten years. The increased production has been achieved at increased levels of JORC measured and indicated resources within the production profile averaging clase to 9096 over the first ten years of production compared with 70% in the scoping study. In addition, the Company saw increased resource grade at most Hemi deposits from resource definition drilling conducted over the past tweive months, particularly at Diucon and Eagle where the average combined resource grade increased by over 30%

De Grey share price snapshot

The company share price is down around 22% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is also down year to date, but less at a 9% loss.

At the current share price, De Grey Mining presides a market capitalisation of $1.29 billion.

The post Why is the De Grey share price rushing higher on Thursday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• Guess which ASX 200 company bought over $65 million of De Grey shares in August
• These are the 10 most shorted ASX shares

Motley Fool contributor Matthew Farley has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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