Aussie penny gold stock jumps nearly 30% on drill results

Australian gold investors got a lift on Wednesday after Empire Resources (ASX:ERL) came out with some impressive new drill results at its Penny's Find gold mine.

The stock leapt 29.4% in morning trading to AUD$.022 after Western Australia-based Empire announced a new underground resource at the mine located 50 kilometres from Kalgoorlie, WA. Mineralization reportedly extends up to 250 metres below the base of the current open pit operation, which extends to 85m. Empire Resources poured its first gold from Penny's Find in October.

According to a press release the underground resource now comprises 56,000 ounces of gold, extracted from 248,000 tonnes graded 7.04 grams per tonne. A feasibility study is due out at the end of March.

Drilling highlights included:

  • 9 metres at 20.6 g/t gold from 12 metres
  •  7 metres at 12.5 g/t gold from 20 metres
  • 7 metres at 12.1 g/t gold from 30 metres

“It is particularly pleasing to see a robust resource in terms of tonnes and grade existing beneath the currently operating open pit. As the resource remains open at depth, further deeper drilling will be required from underground, assuming the final feasibility is positive,” said Empire’s managing director David Sargeant.

Empire owns 60% of the project, with the remaining 40% held by unlisted Brimstone Resources.

A 2012 JORC-compliant resource is estimated at 470,000 tonnes at 4.42 g/t gold, which would yield 66,800 ounces. In 2010 the Company entered into an agreement with Brimstone Resources which subsequently earned a 40% interest in the project by funding exploration.