Red Rock Resources (LON:RRR) surged after it released positive results from an economic assessment of its 20,000 ounce Nyanza deposit on the Migori project in Kenya.
The study looked at the site as an open pit and is part of the first stage of a BFS for Nyanza.
Production would be around 80,000 ounces of gold over a nine year mine life, while the capital costs of US$3 million would be recoverable within the first six months, the firm said.
Projected revenue over the life of the mine at US$1,200 per ounce of gold were put at US$95mln.
This would give a pre-tax net present value of US$8 million for the deposit.
Red Rock chairman Andrew Bell said the results indicated "the Nyanza pit is a potentially robust project and we will continue to work on cost optimisation as we continue our studies".
"RRR will proceed with its objectives of upgrading and expanding existing mineral Resources at Nyanza in parallel with further feasibility phases as well as continuing greenfield exploration."
The consultant, which carried out the study - Applied Geology & Mining (AG &M) concludes that the Nyanza deposit has demonstrated sufficient viability to proceed to the next phase of feasibility study but requires continuing work.
Red Rock currently has a 15% direct and 32.27% indirect interest and options on the Migori project.
Upon completion of a full BFS, Red Rock will acquire a 60% direct interest in the project.
Shares advanced 8.33% to 0.26p.