Panthera Resources PLC (LON: PAT) shares are up 8% this morning on the announcement concerning the drilling programme in Mali. Panthera is prospecting in an area known, for many centuries, to have gold resources and there have long been gold mines in the region. The big question is whether modern techniques can expand upon those old efforts.
A standard part of the gold exploration process is to understand that both exploration and extraction technologies advance. So, as Panthera Resources is doing, every so often the exploration efforts should return to where there have been known historical instances of gold mining. Those new technologies might make another level or round of extraction sensible.
Mali has long been known for gold mineralisation. The artisanal mines of the 14th century made Mansa Musa, the king at the time, the person often regarded as the richest human in all history. Such mining has continued intermittently and the surrounding area hosts several large current mines.
The essential concept is one that has proven valid many a time over. Deposits that could not be found, or could not be mined, with earlier tech might well be with the latest. So, test and test again with each increment of technology. Exactly what Panthera is doing in Mali.
The actual announcement today is that the drilling programme has been in part completed and that the rig has moved on to continue at another such prospect. This sets up a trading opportunity.
The price has moved today on the basis of this announcement. But that drilling has been completed in part is only, well, part of what is going on. That the programme can be successfully concluded reflects well upon the company and management. But the thing that matters is what are the results?
The work at present is to show that there is indeed further gold mineralisation at the sites being explored. The previous artisanal mining efforts show that there were some, some that were easy to exploit. But is there more suitable for the more modern abilities? For that Panthera needs to know the results of the assay of the drilling samples. It’s that which provides the trading opportunity.
Those results are expected in late December. It does, after all, take a little time to properly examine, at an independent expert’s, the content of the drilling samples.
The Panthera Resources share price and corporate valuation are currently being boosted by the news of the drilling programme, yes, but also by the anticipation of what the assay results will be. The actual results, when they arrive, will likely change that valuation again. Significant gold content will likely boost the share price for example. For that would be the first stage in the process of determining that there is something possibly worth mining on the claim.
What the Mali assay results are going to be for Panthera Resources is entirely unknown at present. But what they’re going to be is that trading opportunity for that’s the next driver of the Panthera share price.
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