Alien Metals Ltd (LON:UFO) shares surged higher on Tuesday as the company confirmed the potential for direct shipping of iron ore from the Hancock Ranges and Brockman projects in western Australia over which it holds an exclusive option to acquire a 51% interest.
In late morning trade, Alien Metals shares were 23% higher at 0.18p, having reached an earlier peak of 0.21p.
Independent laboratory analysis of 17 rock chip samples taken from both tenements has highlighted the potential high grade of the ore, with stand-out numbers including 64.2% iron from the Sirius Extension prospect, 63.9% from the Kalgan prospect, 60.3% from the BHP 20 prospect and 65.4% from the BHP 19 prospect.
As a result of these favourable findings, the option period has been mutually extended by 15 days to 18 November 2019.
“The initial assay results and geological information from the technical due diligence field trip are highly encouraging,” said Bill Brodie Good, technical director of Alien Metals.
“Of the 17 samples taken across the two projects, numerous assays returned greater than 60%-plus iron, which is direct shipping ore quality, and the brief geological mapping carried out further enhanced the perceived potential of both projects.
"The assay results corroborate sampling and drilling undertaken by Volta Mining in 2014 at the Hancock Ranges project, and also the significant potential at the Brockman Iron project, where major iron ore companies are drilling on adjacent tenements,” the company said in a statement.
Broker First Equity was equally enthusiastic.
"Along with the impending prospect of news-flow from a project decision in Western Australia, we also await further exploration results from Alien’s extensive portfolio of silver and gold prospective projects in Mexico, and possible news of JV deals," the broker wrote in a note to clients.
"The current modest market cap of around £2m does not reflect the expanding story and target-rich environment of these licences, which are now a lot nearer to becoming Alien Metal flagship projects. To this end, we recommend the shares as a ‘Buy’."
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