Dreadnought Resources (ASX: DRE) shares are up 34% on the day. DRE shares have risen because on their very first day of drilling at the Money Intrusion they say they’ve hit massive Ni-Cu sulphides. Which does seem very lucky indeed. On the other hand, while it’s possible to snigger a bit at the idea of being quite so lucky there is the other way of looking at it. If the deposit really is rich then you’d expect to find it pretty soon after you do first start drilling.
It was only yesterday that they said they were starting to drill: “RC Drilling has commenced at the Money Intrusion Ni-Cu-PGE (First Quantum Minerals Earn-in / JV) with a total of 5 holes planned for ~1,000m including DHEM at Mangaroon Ni-Cu-PGE Project (“Mangaroon”).”
Today we get told that they’ve found something: “RC drilling recently commenced at the Bookathanna North prospect along the 45km Money Intrusion, part of the Mangaroon Ni-Cu-PGE Project (First Quantum Minerals Earn-in). A total of 5 holes was planned for ~1,000m followed by down hole EM (“DHEM”). The first hole (REYRC013, for 153m) was targeting a 37,000S conductor plate and has intersected ~14m of Ni-Cu sulphide mineralisation from 37m. The intersection includes 2m of massive sulphides and 12m of disseminated sulphides. The massive sulphides appear to be high tenor, comprised of 40-50% combined pentlandite and chalcopyrite in equal proportions.”
Dreadnought Resources stock price from Google Finance
Now, if their find is confirmed then of course that will be value additive. This is an earn in so Dreadnought will own ever less of the project the further the work goes. But still, value additive. We’d, ever so gently, suggest that this leap is a bit premature. Possibly too much value being applied to these very early results.
But of course it could indeed be a big and decent find. More information is required to confirm that and we should get the assays in September. “Sulphides are based on visual observation and should not be considered as hard evidence of mineralisation until assays are received” Quite so, DRE shares have already fallen back a bit from their highs today.
