Promising results of revised Resource at WRM’s Mt Carrington

By Trevor Hoey. Published at Oct 9, 2017, in Small Caps

White Rock Minerals (ASX:WRM) has released a revised Mineral Resource estimate for its Strauss and Kylo deposits which form part of the Mt Carrington gold and silver project in northern NSW.

The updated Mineral Resource has resulted in a sizeable increase in the Indicated Mineral Resources within the deposits, a significant development as this will underpin the Stage One Gold First Prefeasibility Study (PFS) expected to be completed this quarter.

As indicated below, there has been a substantial increase in the Indicated gold Resource with a 62 per cent uptick from the previous estimate of 116,000 ounces to 188,000 ounces.

Given the ‘Indicated’ resource category reflects a greater degree of confidence than the ‘Inferred’ category, this is a significant development in terms of the company being able to deliver a material increase in ore reserves.

Another notable feature of the revised Resource is that the gold grade has improved by 10 per cent. The combined Mineral Resource for all deposits at Mt Carrington now totals 225,000 ounces of gold and 8.5 million ounces of silver classified as Indicated; and 116,000 ounces of gold and 14.8 million ounces of silver classified as Inferred.

WRM is working towards establishing a JORC 2012 Resource in relation to these deposits, and on this note Managing Director, Matt Gill said, “The two initial priorities for the feasibility study are to re-estimate the Mineral Resources and report them in accordance with the JORC Code (2012) and complete the definitive metallurgical test work needed to lock down the preferred gold and silver recoveries flow sheet and plant design”.

These activities support the strategic mine planning, open pit sequencing and optimisation that will then proceed in order to report an Ore Reserve that can be reported in accordance with the JORC Code (2012).

White Rock gets rerate after presentation in North America

On October 4, Gill delivered a presentation at the Mines and Money Americas conference in Toronto. While the presentation included commentary on the Mt Carrington project, it also provided significant information regarding the group’s Red Mountain zinc and silver prospect which is located in Alaska.

It could be argued that Australian investors have been slow to grasp the significance of this project, and analysts agree that it isn’t reflected in the company’s valuation. Furthermore, it is often the case that investors in the northern hemisphere have a better appreciation of assets closer to their investment base.

Naturally, Canadian investors would be well aware of successful developments undertaken in and around Alaska. This could account for the company’s share price spiking circa 40 per cent on October 4.

Historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.

After hitting an intraday high of 1.9 cents that day, WRM only retraced slightly towards the end of the week. On the back of a 6 per cent rally this morning, in relation to news of improved gold resources at Mt Carrington, it is trading in the vicinity of 1.7 cents — perhaps the start of a more sustained rerating.

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