Following is an extract from a report by RM Research on St George Mining (ASX: SGQ).
Investment highlight:
- St George Mining (ASX: SQG) announced (19 November 2010) the commencement of a 3,600 metre RC drill program at the Company’s flagship project, East Laverton, on the back of a successful A$4.0 million raising and admission to the official list of ASX on 16 November 2010. Results are due shortly.
- The East Laverton Project covers 20 licences over 1,445 square kilometres and is situated along the Minigwal and Stella Range Faults which are cross-cut by a NESW tensional fault system, informally known as the “Tropicana Trend”.
- The initial drill program will test gold anomalism at the Desert Knight, Desert King and Desert Dragon (gold) Prospects where previous drill testing, mobile metal ion (“MMI”) and geochemical sampling returned strongly anomalous gold values over a 5km x 3km area.
- The tenement is also prospective for Nickel (Zeus Nickel Project - 60km of high MgO Komatiites) and copper (Empire Copper Project) where previous exploration has returned also highly anomalous results.
- The Company’s also has an option to acquire 80% of three exploration licences covering around 1,086 square kilometres on the western section of the Pine Creek Orogen in the Northern Territory (“the Pine Creek Property”), an underexplored area of the Pine Creek Orogen which recent exploration in the district has increased its prospectivity for gold, uranium and rare earths.
- Two prospects of merit occur on the Pine Creek Property. The first is an advanced gold exploration project known as the Blue Thunder Gold Project which was previously drill tested by Homestake Gold of Australia Limited and returned gold values up to 8.68 g/t.
- The White Strike Uranium Project is the second prospect of interest and comprises a radiometric anomaly in an area that appears to have optimal physical and chemical conditions for localising this style of uranium mineralisation.
- The team is chaired by lawyer and ex Dresdner Bank CEO John Prineas with exploration manager Tim Hronsky (20 years international experience including 15 years with Placer Dome) heading up the technical team.
Outlook:
- RM Research is encouraged by the quality of the management and by the large strategic land holding in a district that is known to host world class mineral deposits.
- Significantly the majority of the tenement is only lightly covered with shallow drilling and we are optimistic that more intensive exploration coverage will yield positive results.
- Watch for further updates on the back of the current drill program.
- Speculative Buy.