The $7.3M Capped ASX Gold Stock Chasing $1BN Saracen’s Thunderbox
Catalyst Hunter 25/09/2017
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Tyranna Resources (ASX:TYX) has just acquired over 26km of contiguous strike in the Leonora Goldfields of WA.
Currently capped at $7.3 million, TYX has taken a strategic position (for next to nothing) in close proximity to the $1 billion gold producer Saracen Mineral Holdings (ASX:SAR)’s Thunderbox gold deposit, which is being mined right now.
TYX’s new project is called the Weebo Gold Project, and the company focus will on exploring a geologic model analogous to Thunderbox.
Evidence to date suggests that splays across the project are part of the shear system responsible for the emplacement of the neighbouring 2.3 million ounce Thunderbox gold deposit…
Given TYX’s tiny market cap, this stock is highly leveraged to a significant discovery.
It will all start with some aircore drilling (AC), to the tune of 1000m next month, via 21 holes spaced at 30m — this is based on the Thunderbox analogy — where the mineralised portion of the deposit was typically 30m wide.
In addition to Weebo in WA, TYX has a solid asset portfolio in South Australia including the Jumbuck Gold Project located near the lucrative 1 million-plus ounce, high grade Challenger Gold mine in the Gawler Craton of South Australia.
Results of exploration to date have highlighted the prospectivity for Challenger style mineralisation.
TYX recently raised over $1.5 million from sophisticated investors at 1.7 cents a share, which included one free attaching option per share exercisable at 4 cents and expiring 4 years after issue date. The company is currently conducting a Share Purchase Plan (raise capped at $1M) offered to eligible shareholders on identical terms.
Interestingly for the newer investor, TYX is currently trading at just 1.6 cents a share — and given the new project pickup, TYX may well be worth closer inspection.
Although this is a speculative stock and share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Investors should seek professional financial advice if considering this stock for their portfolio.
The catalyst: Weebo Acquisition
TYX has a lot going for it and has already achieved a great deal for a company with a paltry market cap of $7.3 million.
It’s most recent acquisition was a 26km contiguous strike project in the Leonora Goldfields…
TYX successfully acquired two exploration tenements located in the well-endowed gold fields of Leonora, Western Australia, which is host to 27 million ounces of known gold resources.
A further application for a third exploration licence is pending.
Findings from a recent desktop review of the tenements (E36/880, E37/1328 and E37/1275) carried out by TYX, suggest that the splays are part of the shear system responsible for the emplacement of the neighbouring and geologically-similar, 2.3 million-ounce Thunderbox gold deposit.
Imminent drilling at Weebo
Following a successful acquisition of the Weebo Project, TYX is jumping straight into drilling.
The next phase of exploration at the Weebo Gold Project is anticipated to commence next month.
In October, TYX will commence a scout air-core campaign targeting 21 holes for approximately 1,000 metres of drilling.
The results from this batch of drilling will come just weeks later.
The Weebo acquisition and imminent drilling is not the only catalyst that TYX has up its sleeve.
Notable prospects and Resources in TYX’s sights
TYX has four projects in focus for the coming six months — Jumbuck, where it controls over 9700 square kilometres of ground surrounding the Challenger Gold Mine, Greenwood and the recently acquired, Weebo.
The primary focus here is to discover and develop gold operations within Jumbuck with an initial target of a 500,000oz gold resource.
Here’s a look at the Jumbuck tenements and key prospects:
In terms of existing Resource potential, TYX’s Jumbuck Project is currently its most advanced from a development perspective. Here are the known Resource estimates:
These are strong numbers and indicates Jumbuck’s highly prospective nature, with the Project area considered geologically analogous to the Fraser Orogen in Western Australia, host to the Nova-Bollinger nickel-copper and Tropicana gold operations.
A number of occurrences of gold mineralisation similar to that at Challenger have also been defined via historical and current exploration with the resource defined in five separate occurrences, all of which are still open. There is also the possibility to treat mineralisation through Challenger if a viable resource is found and a commercial agreement reached between the companies.
Exploration to date has only followed up ~20% of anomalies outlined by the original reconnaissance work over the area, with ~250 targets still requiring follow up, which leaves a lot of upside.
Jumbuck could provide TYX with further blue sky as it follows up following up on a new line of exploration at Jumbuck via the Greenwood and Typhoon prospects.
Located less than 40km from the prolific (and active) Challenger mine, Typhoon folds into TYX’s Jumbuck Project. It could soon see significant results trickling in with assay results collected so far, show the following:
– 1m @ 50.7 g/t gold from 71m (17TYRC004)
– 13m @ 3.88 g/t gold from 47m (17TYRC012) including 4m @ 10.18 g/t
– 5m @ 2.55 g/t gold from 70m (17TYRC013) including 1m @ 7.5 g/t
– 14m @ 1.24 g/t gold from 32m (17TYRC004)
– 3m @ 2.95 g/t gold from 45m (17TYRC001)
The Macro Background
Gold prices have remained stable and are now ticking up again.
The past performance of this product is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.
Since blowing past the $1,000/oz. mark in the GFC between 2007-to-2009, gold prices never retreated back below $1,000/oz.
Yet commodity prices do fluctuate and caution should be applied to any investment decision here and not be based on spot prices alone. Seek professional financial advice before choosing to invest.
Geopolitical risks mixed with economic turmoil have ensured a steady flow of demand for gold, both as an investment and as a long-term store of value.
This means gold producers have a great window of opportunity to get into gold production, but only if the project is viable at ~$1,000/oz gold prices. The gold explorers that have failed to instil such efficient production schedules have fallen by the wayside. This is where companies like TYX hope to capitalise, by acquiring existing overlooked gold projects and going out into the field with their own drill-bit to conduct extensive drilling programmes.
On your marks, get set, drill.
There is plenty of room for a growth spurt for the $7.3 million-capped TYX over the coming months.
That’s because TYX is doing something akin to a pincer movement — on one side TYX has its shovel in hand, intending to drill a further 10,000m in the coming 6-12 months.
But also, and equally as important, TYX is looking to continue its growth acquisition strategy starting with the Weebo acquisition on or adjacent to an existing 28 million ounces of known and verified gold Resources belonging to much larger Majors such as Challenger.
The only question that remains is whether this little gold starlet has the allure for our readers, to add it to their small-cap portfolios.