October 26th, 2021 | 13:26 CEST
Desert Gold, B2Gold, Barrick Gold: This news changes everything
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"[...] We can make a big increase in value with little capital. [...]" David Mason, Managing Director, CEO, NewPeak Metals Ltd.
Desert Gold: Alleged largest gold zone hardly explored so far
The share of Desert Gold has been an insider tip among gold investors for several years - last year alone, the share tripled between April and July. In the meantime, however, the stock has given up these gains. The reasons were not bad drilling results but the accompanying effects of a capital increase, which diluted the number of shares and put the price under pressure. However, the drill results published yesterday, coupled with other facts, could turn the tide for Desert Gold: As part of the recently completed exploration program of a total of 267 drill holes over 18,161 meters, Desert Gold published the results of 25 drill holes. These included grades of 1.13 g/t gold over 42 meters, 1.12 g/t gold over 33 meters and 1.06 g/t gold over 29 meters. Significantly higher grades of up to 1.65 g/t were encountered within some of the drilled intervals. What is unique about the results is that the drilling has proven gold in areas that Desert Gold had not previously shown. It is, therefore, a new discovery that has the potential to significantly shape the overall picture of the property, which covers a total area of around 440 square kilometers. In 2022, Desert Gold plans to pick up where it left off in the summer of 2021 and is planning new exploration drilling.
The Company emphasizes that the alleged largest gold zone on the SMSZ concession area may not have been sufficiently explored: A few months ago, Desert Gold acquired another concession with Kolomba. The 30.6 sq km area shines with 16.03 g/t gold over 7 meters, 7.78 g/t gold over 19 meters, and 3.51 g/t gold over 29 meters, and will be further explored as part of upcoming exploration work. "It is interesting to note that this property was last worked in 2003 when gold prices averaged USD 363 per ounce," commented Desert CEO Jared Scharf at the time of the Company's intentions.
Is the illustrious neighborhood already eyeing Desert Gold?
The SMSZ project in Mali is considered Desert Gold's most important property. Other projects include Djimbala, also in Mali, Anumso in the Ashanti Belt in Ghana and Rutare in Rwanda. Recently, however, the market's focus has been more on SMSZ. There are good reasons for this. The property is large and holds equally significant potential for new discoveries. The upcoming drill programs are likely to be watched very closely, especially by Desert Gold's neighbors in the Shear Zone between Senegal and Mali. These include companies such as Barrick Gold (Loulo and Gounkoko), Endeavour-Teranga (Massawa, Sabodala, Gora), B2Gold (Fekola) and Algom Resources (B & C Zones, Tabakoto & Segala, Djimbaya II) as well as Allied Gold (Yatela, Sadiola). The more progress Desert Gold makes on its SMSZ property, the more likely it will become a takeover candidate for neighbors in the region. Currently, Desert Gold's stock is valued at only about EUR 20 million. Given the potential and the big wheel that management is turning with extensive drilling programs, this valuation seems low. The current rather wait-and-see attitude on the gold market is probably also why the share has not yet taken off.
At the latest, since the new discovery was announced yesterday, Desert Gold is likely to move back into the focus of investors. Even if the immediate market reaction to the drill results has failed to materialize, it can be assumed that Desert Gold's neighbors, in particular, are watching the Company closely. If further promising discoveries follow or the gold price picks up, things could move very quickly for Desert Gold.
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