ASX bank shares such as Commonwealth Bank of Australia (ASX: CBA) have been on a tear over the last few weeks. Even though CBA shares have pulled back today (at the time of writing), they’re still up more than 17% since 25 May.

And it’s not just CommBank. The other ASX major banks Australia and New Zealand Banking GrpLtd (ASX: ANZ), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have all seen similar, if not more enthusiastic moves in recent weeks.

Now, that’s all well and good for any shareholder that picked up ASX bank shares any time over the last 2-3 months.

But what of the long-term prospects of our big 4? Well, one ASX fundie isn’t betting the house (or even the barn) on a triumphant return to banking supremacy and flowing ASX bank dividends.

Are ASX bank dividends in trouble?

According to reporting in the Australian Financial Review (AFR), Airlie Funds Management’s portfolio manager, Matt Williams is holding a more bearish view of the banks for the coming months and perhaps years. Williams has stated that the banks are set to bear the brunt of the withdrawal of various government stimulus measures.

The federal government has embarked on the largest social spending program in history. Measures like JobKeeper and the coronavirus supplement payments for those on JobSeeker and other government payments launched in an attempt to blunt the edge of the coronavirus’ impact on the economy.

But, as Williams points out, these measures were never designed to be permanent and are heading towards a wind-down phase in the coming months. When this happens, Williams warns that the banks will bear the full impact of this cliff:

“They are the backstop for all this and how this plays out over the rest of the year… we’ve got 10 per cent of mortgages on deferral [and] 6 per cent of SME loans on deferral. So … as some of the stimulus is withdrawn, what’s going to happen to the bad and doubtful debt charge?”

As a result of this, Mr Williams is saying the banks will struggle to return to paying the level of dividends investors have become accustomed to in the past, stating:

“I think that’s clear from the crisis, they are paying too much in dividends. I think conservative boards will really rein in that payout ratio. So I think with dividends shrinking a bit, it’s hard… to make a really strong bullish case for the banks.”

What does this mean for ASX investors?

I think Mr Williams has a very strong point here. And anyone who holds ASX bank shares should be thinking very carefully today about what to expect from their banks over the coming years. There are a lot of headwinds right now in the banking sector, without the company of too many tailwinds. Low-interest rates aren’t good for bank’s profitability or their ability to fund dividends. Neither is sluggish economic growth and reduced appetites for credit. These are all factors the banks are facing today (and will probably continue to face for years).

As such, I have to agree with Mr Williams in not being too bullish on the future of the banks for the next year or so – especially from a dividend investing perspective. Farther than that? Frankly, who knows. But it’s not a risk I’m willing to take today, that’s for sure.

More reading

• Why Afterpay, Amcor, Computershare, & Westpac shares are dropping lower
• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• What is the ASX impact of a fall in house prices?
• My share investing journey during the pandemic

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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.

The post Fundie sees trouble ahead for ASX bank dividends appeared first on Motley Fool Australia.

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The Wesfarmers Ltd (ASX: WES) share price has been caught up in the selloff on Thursday and is dropping notably lower.

At the time of writing the conglomerate’s shares are down 3.5% to $42.30.

Is the Wesfarmers share price in the buy zone?

I think this pullback could be a buying opportunity for investors looking for strong blue chip shares to buy for the long term.

Thanks to its collection of quality businesses such as Bunnings, Kmart, and Officeworks, I believe Wesfarmers is well-positioned to achieve solid earnings and dividend growth over the next decade.

Another positive is the hefty cash balance the company is sitting on following the sale of part of its stake in supermarket giant Coles Group Ltd (ASX: COL). I expect these funds to be used to make earnings accretive acquisitions in the near future.

Overall, I think this puts the Wesfarmers share price is in the buy zone right now. Though, not everyone is as positive on the company as I am.

A note out of Goldman Sachs this week reveals that its analysts have placed a neutral rating and $42.50 price target on the company’s shares.

Why is Goldman lukewarm on Wesfarmers?

The broker explained that its neutral rating is due to valuation reasons.

Using a sum of the parts and discounted cash flow valuation model, it sees $42.50 as fair value for its shares. This means there is limited upside for investors over the next 12 months, even if you include dividends.

Though, it does see a number upside risks that could lead to a positive revision to its valuation. These include improvements in consumer sentiment around discretionary purchases, a faster turnaround of the struggling Target business, value accretive acquisitions, capital management, and favourable rental negotiations.

However, until these potential factors become a reality, Goldman is sticking with its neutral rating.

Instead, it prefers Harvey Norman Holdings Limited (ASX: HVN) in the retail sector. This morning it put a buy rating and $4.05 price target on its shares.

More reading

• Why I think Wesfarmers is the best ASX blue chip
• Leading brokers name 3 ASX 200 shares to sell today
• ASX 200 jumps 2.4%, unloved shares keep rising
• Not keen on Westpac? Then buy these top ASX dividend shares instead
• Can the Wesfarmers share price continue to rise after its market update today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers Limited. 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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It is an important practice to properly review your stock investment portfolio on a regular basis and ask yourself questions like: “Why do I own shares of Monadelphous Limited (ASX: MND) at its current share price?” For me, this is just before the end of the financial year because it helps me with my tax planning. I would recommend doing something similar annually, bi-annually or every quarter when results are announced.

During this year’s review, I found myself asking the question: “Do I still want ‘in’ at the current Monadelphous share price?” This is a very personal question so it is important to define who I am as an investor and my investment strategy.

My share investor profile

• Demographic: Generation Y
• Investment time horizon: 50 years +
• Investing experience: High
• Risk tolerance: Very high
• End goals: Join the Financial Independence Retire Early (FIRE) movement and go travelling. Pass on a legacy to my kids.

My share investment strategy

Because I have so long to invest and minimal financial commitments, I am able to be an ultra long-term, aggressive growth investor. My strategy is to build a highly diversified portfolio of quality growth companies with a lot of risk yet massive multi-bagger potential. I invest funds into the market on a monthly basis (or as close to as possible).

So, at the current Monadelphous share price, should I keep owning shares?

Monadelphous is a share that I bought at the start of my investing career. At the time there was an increase in capital expenditure in the materials sector and Monadelphous was benefitting as a result. My investment was also benefiting with a gain of up to 28% (excluding a healthy dividend) within a few years. Unfortunately, that all changed and I’m currently sitting on an annualised total return of about half of what the S&P/ASX 200 Index (ASX: XJO) has achieved. The Monadelphous share price is $12.70 at the time of writing.

In general, I’m not a massive fan of the resources sector because there is no real pricing power. Often the lowest cost producer wins, but there is still direct commodity price risk. But, because I was so keen on diversifying at the time, I felt I needed some exposure to the sector. Monadelphous seemed like a great shot because not only was it exposed to capital expenditure during boom times, but it had a strong and growing maintenance business to soften the cyclical nature of the industry.

With many more years of investing under my belt, I now have a very diversified portfolio. Further, I know that so long as I am comfortable with my sector allocations I don’t need to be invested into everything out there. Monadelphous like Challenger Ltd (ASX: CGF) doesn’t fully align with my investment strategy, so I have to ask myself if I should hold or sell. Right now, I’m not sure.

Foolish bottom line

Writing your investing reasons down is extremely important. It allows you to understand what you were thinking at the time, without any hindsight bias. This makes it a powerful tool for making buy or sell decisions with your shares. Additionally, it provides a great resource for educating yourself as an investor. 

Investment strategies and goals will change so a point of reference is crucial. Invest based on your own personal circumstances and goals at that point in time.

More reading

• All Technology Index sees stunning comeback
• Top brokers name 3 ASX 200 shares to buy today
• Is the Scentre share price cheap today?
• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth

Motley Fool contributor Lloyd Prout owns shares of Monadelphous Limited and expresses his own opinions. The Motley Fool Australia owns shares of and has recommended Challenger Limited. 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.

The post Should I keep my stake at the current Monadelphous share price? appeared first on Motley Fool Australia.

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The Beston Global Food Company Ltd (ASX: BFC) share price is flying higher today after the company announced the sale of its dairy farms in Mount Gambier.

As its name suggests, Beston Global is in the business of food. The company aims to provide natural and verifiably safe food and beverages to global markets.

To achieve this, it owns the raw materials, utilises technology in the production process, and controls distribution.

Beston Global’s range of products focuses on the food groups of dairy and meat.

Why is the Beston Global share price rocketing?

This morning, Beston announced it has signed an agreement to sell its dairy farms in Mount Gambier to Aurora Dairies for $40.4 million cash.

Under the terms of the agreement, Beston will receive all milk from the farms, which is currently around 17 million litres per annum, over a 10-year period. It also has the option to extend this period.

The sale process for the farms was conducted through an international open tender process which commenced at the beginning of this year.

Beston highlighted that the proposed transaction achieves its strategic objective of releasing capital for re-investment in higher returning dairy factory assets, while securing long-term milk supply from the farms.

Proceeds from the sale will be used to reduce balance sheet gearing to around 10% and fund the company’s mozzarella and lactoferrin production expansion.

The transaction is subject to approval from the Foreign Investment Review Board and other usual conditions. Subject to the relevant approvals and conditions being satisfied, Beston expects to complete the transaction by 30 September 2020.

Management commentary

In today’s announcement, chief executive Jonathan Hicks noted that the demand for the company’s mozzarella products has been steadily increasing. This is despite the closure of restaurants and other food service outlets during the COVID-19 lockdown period.

And in regard to the update, Mr Hicks said:

“The sale of the farms, the securing of milk supply and the positioning of the business to focus on Beston’s strategic growth initiatives comes at a good time for the business as we work through the other side of the restrictions brought on by COVID-19.”

At the time of writing, the Beston Global share price has rocketed 40% higher to 7.7 cents. This takes the company’s current market capitalisation to around $36 million.

More reading

• Is the Wesfarmers share price good value?
• Should I keep my stake at the current Monadelphous share price?
• All Technology Index sees stunning comeback
• Top brokers name 3 ASX 200 shares to buy today
• Is the Scentre share price cheap today?

Motley Fool contributor Cathryn Goh 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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The S&P/ASX All Technology Index (ASX: XTX) launched at the end of February this year, right before the March market meltdown. The meltdown battered the All Technology Index, causing it to fall from above 2,000 to below 1,200. Since then, however, the index has staged a roaring recovery, climbing to nearly 2,200. The index sits at 2,075.20 at the time of writing. 

Market meltdown takes toll

Many of the major constituents on the Index were battered in the market meltdown. Afterpay Ltd (ASX: APT) fell nearly 80% from its peak, while WiseTech Global Ltd (ASX: WTC) fell more than 60%. Shares in Webjet Limited (ASX: WEB) fell 76%, EML Payments Ltd (ASX: EML) shares dropped 75%, and Domain Holdings Australia Ltd (ASX: DHG) shares fell 54%. 

V-shaped recovery

But since the March low point, the index has seen a V-shaped recovery led by strong surges in the share price of constituent companies. At the time of writing, Afterpay is now up more than 400% from its low, while the WiseTech Global share price has gained more than 100%. Webjet shares are up 100% from their low, EML Payments shares are up 208%, and Domain Holdings shares are up 95%. 

Following the recovery, the companies in the All Tech Index boast a combined market capitalisation of more than $100 billion. There’s no doubt the index had a rocky start, but it serves an important purpose. In the 5 years prior to its launch, the number of tech shares listed on the ASX doubled from 100 to over 200. The All Technology Index is designed to be a broader, more inclusive index than the previously existing S&P/ASX 200 Information Technology Index (ASX: XIJ), which only covers tech companies in the ASX 200. 

Impressive returns 

Despite its rollercoaster start, the All Technology index is seen as highly investable, with returns from investing in technology exceeding returns on the benchmark S&P/ASX 200 Index (ASX: XJO) in recent years. Over the 3 years prior to the launch of the All Technology Index, the ASX 200’s annualised total return was around 10%. Over the same period the technology companies that would have been in the All Technology Index (had it existed) would have returned over 20%.

Since the market low in March, ASX 200 has gained 32% (at the time of writing). The All Tech Index, on the other hand, has surged more than 75%, showing the strength of its constituent stocks. There is no doubt ASX technology shares are increasingly popular with investors. The All Technology Index will continue to provide an accessible option to invest in the sector and gauge its progress. 

More reading

• Should I keep my stake at the current Monadelphous share price?
• Top brokers name 3 ASX 200 shares to buy today
• Is the Scentre share price cheap today?
• Why Afterpay, Amcor, Computershare, & Westpac shares are dropping lower
• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO, Emerchants Limited, and WiseTech Global. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Emerchants Limited. 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

CSL Limited (ASX: CSL)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and cut the price target on this biotherapeutics company’s shares to $323.00. The broker has reduced its earnings forecasts for FY 2021 and FY 2022 due to concerns that higher plasma collection costs could impact its margins. Nevertheless, it still sees a lot of value in CSL’s shares at the current level and has retained its outperform rating. I agree with Credit Suisse and feel that CSL is in the buy zone after its recent pullback.

Harvey Norman Holdings Limited (ASX: HVN)

Analysts at Goldman Sachs have retained their buy rating and lifted the price target on this retailer’s shares to $4.05. According to the note, Harvey Norman’s sales for the five months ended 31 May 2020 were stronger than it expected. And while the broker notes that the company has not revealed whether its strong sales growth has flowed through to the bottom line, it believes the announcement of a special dividend is an indication that this has happened. Outside this, it notes that its shares are trading on lower than normal multiples despite a strong gain over the last month. I think Goldman makes some good points and Harvey Norman could be worth considering.

Northern Star Resources Ltd (ASX: NST)

Another note out of Credit Suisse reveals that its analysts have upgraded this gold miner’s shares to an outperform rating with a $14.70 price target. The broker made the move after increasing its gold price forecasts through to 2022. And while there are many gold miners that will benefit from the strong gold price, it believes Northern Star is a top pick. Especially given its current valuation. I agree with Credit Suisse and believe Northern Star would be a good option for investors wanting exposure to gold.

More reading

• Should I keep my stake at the current Monadelphous share price?
• All Technology Index sees stunning comeback
• Is the Scentre share price cheap today?
• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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.

The post Top brokers name 3 ASX 200 shares to buy today appeared first on Motley Fool Australia.

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The Scentre Group (ASX: SCG) share price has plummeted 6.51% lower today but is the ASX real estate investment trust (REIT) in the buy zone?

Why is the Scentre Group share price crashing lower?

The S&P/ASX 200 Index (ASX: XJO) has fallen 2.29% lower to 6,007.90 points at the time of writing. Scentre has dropped even lower in today’s trade despite no new announcements.

Scentre isn’t the only ASX REIT to be falling today. The Mirvac Group (ASX: MGR) share price is down 3.6% at $2.41 right now while Stockland Corporation Ltd (ASX: SGP) is down 5.63% to $3.69 per share.

ASX 200 shares have stabilised a lot since the bear market in February and March. However, I think the Scentre share price is one of the harder shares to value right now.

There’s a lot of uncertainty about Aussie real estate. That includes residential, office, commercial and industrial.

The Scentre share price is still down 36% this year despite a rally in recent weeks. Scentre owns and operates Westfield shopping centres around Australia and New Zealand.

That means Scentre is heavily focused on Aussie retail. Given the industry was struggling even before the coronavirus pandemic, there are still big question marks about a rebound in 2020 or 2021.

That means shares in ASX REITs like Scentre remain volatile. 

Is the Aussie REIT in the buy zone?

A 6.51% drop in one day’s trade means the Scentre share price may be cheap. However, I think it’s still a speculative buy right now given the current environment.

In contrast, today’s winners have largely been ASX gold shares.

The Northern Star Resources Ltd (ASX: NST) is up 7.46% today while Saracen Mineral Holdings Limited (ASX: SAR) shares have surged 5.65% higher.

It’s hard to say that there has been a fundamental shift in the Scentre share price from yesterday’s trade. That says to me that investors are still uncertain on where things are headed in the retail sector in 2020.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• 3 ASX 200 shares I’d buy for 2020 and beyond
• What is the ASX impact of a fall in house prices?
• 3 great shares to buy now if you’re an ASX 200 investor in your 20s

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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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Today, the Newcrest Mining Limited (ASX: NCM) share price is up almost 5% following the release of an exploration update by the company. The update reported strong drilling results from its Havieron and Red Chris sites. It’s preparing to expand known mineralisation during a time when gold is fetching $1733.31 per ounce.

Havieron

Newcrest commenced drilling at its Havieron Western Australia site in June 2019 and has continued to increase drilling activity since. It currently has 9 drill rigs in operation at the site with 20,200 metres drilled since the end of March 2019. This project is operated under a farm-in agreement and Newcrest now holds a 40% interest. Newcrest can earn up to a 70% joint venture interest in the project should it invest US$65 million and meet a series of exploration and development milestones by 2026.

According to the announcement, the drilling conducted at Havieron will expand known mineralisation by a further 220m. It also saw the best significant intercept at Havieron to date with 109m at 6.3g of gold per tonne.

In the report, Newcrest Managing Director and CEO, Sandeep Biswas said,

“We are excited by the drilling results at Havieron and Red Chris. At Havieron we have returned our best drill result to date and with the step out drilling result we see real potential to further expand this orebody. Getting underground is now the priority and we continue to progress the work to commence decline development by the end of this calendar year or early 2021.”

Red Chris

The Red Chris site is located in Canada and is a joint venture with Newcrest holding a 70% interest. The company has had an interest in this site since August 2019. Newcrest reported a total of 10,686 metres of drilling has been completed since the March quarter. Since the company entered the joint venture, this has equated to 40,069 metres of drilling. 

Drilling at Red Chris has been separated into 2 campaigns, one at the East Zone and one at Brownfields Exploration. The report stated, “Infill drilling at Red Chris has confirmed continuity of high grade within East Zone’. This positive news may have contributed to the increase in the Newcrest share price.

About the Newcrest share price

The Newcrest share price is up 44% from its 52 week low of $20.70. It is slightly up from its $29.82 price at the beginning of 2020. The Newcrest share price was looking hopeful before the coronavirus crisis hit. It has since recovered and is now $29.87 at the time of writing.

More reading

• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• Why Aventus, Kogan, Newcrest, & Northern Star are pushing higher
• 5 things to watch on the ASX 200 on Thursday
• High gold price a boon for Silver Lake after latest drilling results
• ASX 200 Weekly Wrap: ASX bulls crash through 6,000 points

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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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is dropping notably lower on Thursday. In afternoon trade the benchmark index is down a disappointing 2.3% to 6,007.9 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower: 

The Afterpay Ltd (ASX: APT) share price is down 3% to $52.78. This appears to have been driven by profit taking after some strong gains by the payments company this month. In fact, on Thursday the Afterpay share price jumped to a new record high of $54.85. When its shares hit that level, they were up a whopping 585% from their March low.

The Amcor PLC (ASX: AMC) share price has fallen almost 4% to $13.87. Investors have been selling the packaging company’s shares after it was downgraded by analysts at Credit Suisse. According to the note, the broker has downgraded its shares to a neutral rating with a $15.65 price target. It made the move on valuation grounds after a strong rally since March.

The Computershare Limited (ASX: CPU) share price is down over 6% to $13.15. The catalyst for this decline appears to have been a broker note out of Citi. This morning the broker downgraded Computershare’s shares to a sell rating with a reduced price target of $12.00. The broker believes trading conditions are challenging and expects it to be a couple of years until the company’s earnings rebound.

The Westpac Banking Corp (ASX: WBC) share price has sunk a sizeable 5% lower to $18.74. Investors have been selling Westpac and the rest of the big four banks on Thursday. This may be due to profit taking after some very strong gains over the last few weeks. Even after this decline, the Westpac share price is up 23% over the past three weeks.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• ASX growth companies including Zip Co cash in on the rise of e-commerce
• My share investing journey during the pandemic
• 3 ASX shares to buy now with $10,000

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended Amcor Limited. 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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The Breaker Resources NL (ASX: BRB) share price is flying higher today after investors responded enthusiastically to promising drilling results.

At the time of writing, Breaker Resources shares are up 17.39% to 27 cents apiece. This takes the company’s current market capitalisation to around $62 million.

Breaker Resources is a small-cap ASX gold explorer. It is focused on discovering and developing new gold deposits hidden by transported cover in Western Australia’s Eastern Goldfields Superterrane.

Breaker Resource’s cornerstone project is the 600 square kilometre Lake Roe Gold Project. The project is located 100 kilometres east of Kalgoorlie and comprises 7 granted exploration licenses plus a mining lease.

Why is the Breaker Resources share price spiking?

This morning, Breaker Resources announced that preliminary drilling results have highlighted the potential for a significant gold discovery at the Kopai Prospect within the Lake Roe Project.

These results relate to the first 32 reverse circulation (RC) drill holes of a 60-hole program targeting the 2 kilometre Kopai-Crescent area.

Preliminary results from the first 32 RC holes include:

• 4 metres at 4.54 g/t gold from 84 metres;
• 4 metres at 2.68 g/t gold from 20 metres; and
• 4 metres at 2.53 g/t gold from 20 metres.

Breaker Resources stated the results are significant given the geological setting and wide-spaced nature of the drilling. Four of the five more significant drill intercepts are situated on the end of drill lines.

The first 32 RC drill holes represent a total of 3,445 metres of drilling and an average depth of approximately 108 metres. Most assays relate to composite samples over 4 metre intervals.

The mineralised zone is concealed by less than 5 metres of transported cover, extends for at least 600 metres of strike, and remains open and sparsely drilled.

The immediate aim of the drilling is to assess and scope the full potential of the 9.5 kilometre-long aircrew gold anomaly centred on the 1 million ounce Bombara deposit.

“The Kopai results reinforce Breaker’s belief that Lake Roe is a new, large gold camp centred on the 1Moz Bombora deposit, which itself continues to expand at depth,” the announcement read.

Results are pending for a further 28 RC drill holes. Meanwhile, the company is planning follow-up drilling at Kopai, which will include shallow diamond drilling to obtain early information on the host rocks and mineralised structures.

More reading

• ASX bank share prices tumble as they aren’t out of the COVID-19 woods yet
• How the A2 Milk and Bubs share prices have performed during the pandemic
• ASX 200 drops 2%: Big four banks sink lower, JB Hi-Fi to deliver strong profit growth
• Get paid huge amounts of cash to own these ASX dividend shares
• Why the 5G Networks share price is charging higher today

Motley Fool contributor Cathryn Goh 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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