Results of June drilling could be major catalyst for Mandrake
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Mandrake Resources Ltd (ASX:MAN) has commenced drilling at the company’s promising Newleyine PGE-nickel-copper prospect.
This is a much-anticipated program, with interest spurred on by Chalice Mining's (ASX: CHN) success at its nearby Julimar PGE-nickel-copper discovery.
Since January last year, Chalice’s share price has increased some 5000% with most of that gain being attributable to the Julimar discovery and subsequent drilling.
The Newleyine prospect lies within Mandrake’s Jimperding Project and is located 30 kilometres east of Chalice’s Julimar PGE-nickel-copper discovery in the same geological terrane.
Mandrake has identified multiple similarities to Julimar at Newleyine, including the presence of several large electromagnetic (EM) conductor plates.
Investors are expecting big things of Mandrake with its shares having increased three-fold since management announced in February that the company had been granted land access to Newleyine, as well as the negotiation of a binding purchase option.
This provides Mandrake with the option to purchase the property and associated mineral rights outright in the event of a commercial discovery, substantially de-risking any potential future development of a mining operation.
The land agreement alone triggered a doubling in the group’s share price so one can only imagine that drilling success will have a profound impact.
Indeed, when management announced only a matter of weeks ago that drilling was due to commence shortly the company’s shares spiked approximately 50%.
Share price retracement may present buying opportunity
It would appear that some profit-taking last week resulted in a slight retracement with the group’s shares pulling back from a 12 month high of 25 cents to about 21 cents.
This may represent a buying opportunity, particularly given drilling is in progress, the results of which could be a prominent share price catalyst.
The initial phase of diamond drilling includes three holes, each targeting one of the three electromagnetic (EM) conductor plates identified by the ground-based fixed loop EM (FLEM) survey conducted in 2020.
Once complete, drill holes will be cased ahead of a down-hole EM (DHEM) survey designed to identify any off-hole EM conductors.
Drill holes will be approximately 300 metres total depth, with the initial drilling phase scheduled to take around 3-4 weeks.
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