Mako teams up with Orbis Gold drilling partner

By Trevor Hoey. Published at Oct 9, 2019, in Mining

It was only yesterday that Finfeed highlighted the exploration upside that lay in Mako Gold Ltd’s (ASX:MKG) projects in Côte d’Ivoire and Burkina Faso.

On Tuesday morning the company added a further feather to its cap, announcing that it had negotiated a highly beneficial agreement with Geodrill which will maximise drilling metres and preserve cash during the upcoming campaign.

This is an important development as Geodrill has partnered with Mako’s management team in the past, having drilled on previous discoveries together in Burkina Faso where the Orbis Gold Project progressed to become a major producing mine.

Harking back to what we discussed yesterday, it is no secret that companies in the exploration and discovery phase can experience significant share price re-ratings based on news flow.

As an example, we pointed to Côte d’Ivoire gold explorer Tietto Minerals’ (ASX:TIE) share price performance since it listed on the ASX in January 2018.

Obviously, news from exploration activity was going to take some time to filter through, but as is often the case there was little acknowledgement of this prospective development, and the company’s share price plunged from 24.5 cents shortly after listing to a low of 5.5 cents, against an issue price of 20 cents per share.

However, promising exploration results have emerged in 2019, and the company’s shares have rebounded, now trading in the vicinity of 25 cents.

While this only leaves early stage investors just in the money, forward-looking investors who saw the imminent value in the stock at a lower point are now looking at some handsome gains.

Consequently, as we underlined yesterday it comes back to where companies are at on the exploration/discovery curve, and if you look at some of the key takeaways regarding Mako, now may be the time to pounce.

Correlation between Mako and Tietto

There is a strong correlation between where Mako’s share price currently lies on the curve and where Tietto Minerals was at the end of 2018.

While Mako has had some outstanding early stage exploration success in terms of drilling results that have yielded both robust intersections and strong grades, the potentially market moving news is likely to emerge in 2020.

Further drilling will recommence after the wet season in November, and shareholders can expect to see a similar run of news in terms of volume of results as that delivered by Tietto.

While it is impossible to predict the quality of results, early stage exploration at the Napié Project in Côte d’Ivoire have included wide and high-grade intersections, including 28 metres at 4.9 g/t gold, and in a short time frame the group has doubled the strike length of the mineralised zone.

The collaboration with Geodrill will go a long way towards Mako building on its exploration success in 2020.

As outlined in the following statement by managing director Peter Ledwidge, not only is the agreement extremely beneficial from a financial perspective, but there is an established relationship between the parties.

Ledwidge said, “We are extremely pleased to have secured a drill-for-equity agreement with such a high-calibre drilling company.

‘’We have a long-standing relationship with Geodrill and have always been impressed with the quality of their work.

‘’It will be a great endorsement for Mako to add Geodrill to our share register, since they have worked in West Africa for so many years and understand junior exploration companies better than most.

‘’We look forward to continuing and strengthening our relationship with Geodrill, which should be beneficial to all Mako shareholders.”

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Thanks for subscribing!

X