VSA Morning Miner, 09/09/20
Tectonic Gold (NXX:TTAU)
Tectonic Gold (NXX:TTAU) has announced a placing of c£400k at a price of 0.275p/sh. to fund a ten hole drill programme in October 2020. The drill programme will be focused on the company’s core assets in Queensland, Australia. Results received in early 2019 for the last drill programme were encouraging with intercepts of up to 35g/t Au at the Specimen Hill target, however, the company has spent the last twelve months refining its exploration approach and working up new targets aided by bush fires which have cleared scrub and enabled significant additional surface exploration. This enabled a new target, Southern Copper, to be discovered where surface samples yielded positive results of up to 16% Cu and 9g/t Au.
Perhaps most encouragingly, Rio Tinto secured contiguous license claims in March 2020 highlighting not only the prospectivity of the region where major mines such as Mt Morgan have been discovered but that of the immediate local geology surrounding TTAU.
Previously TTAU completed exploration work at Specimen Hill and Mt Cassidy, presented as a geological analogue of Mt Morgan, and the ten hole programme will be split amongst these two targets with two test holes at the new Southern Copper target. This programme will be entirely comprised of RC drilling with holes to depths of c400m with a focus on high chargeability anomalies.
The total share capital is now 844m shares and participants in the raise receive one-for-one “Drill Warrants” which may be exercisable at any time prior to expiry 30 days after the results of the drilling programme are published. The warrants are priced at 0.7p/sh.
Given the macro tailwinds and reinvigoration of the Australian gold exploration sector the backdrop for drilling highly prospective targets is strong and with the additional conviction the company has gained since its last drill programme, which intercepted mineralisation with every hole, TTAU has built a strong platform to maximise the chance of success.
We reiterate our Speculative Buy recommendation.
Oliver O'Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: oodonnell@vsacapital.com
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: prenken@vsacapital.com
VSA Capital Research | T: +44 (0)20 3005 5000 | E: research@vsacapital.com
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