Mako teams up with Orbis Gold drilling partner
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.”