BPM hits 30m of gold at 1.8g/t next to $2.4BN Capricorn Metals
Our micro cap Investment BPM Minerals (ASX: BPM) may have just hit a new gold discovery…
BPM hit 30m at 1.8g/t of gold at its Claw project - which borders $2.4BN Capricorn Metals Mount Gibson mine.
AND the intercept starts from a depth of just 25m.
Mount Gibson is Capricorn’s most advanced development asset and is being advanced toward development.
Capricorn’s development ambitions means that any discoveries close by could be interesting from an M&A perspective.
After today’s result, BPM could be onto something that Capricorn might show an interest in.
Going into today’s results BPM’s market cap was <$3.5M which is most likely why the BPM share price is already up by over 100%.
At one point this morning BPM touched 14.5c per share (up almost 200% from yesterday’s close) on some serious volumes.
At the time of writing this (~11:30am AEST) almost 1/3rd of BPM’s share register had changed hands which is huge for setting a new base in the BPM share price.
Our take on the drill results:
The key takeaways for us from today’s announcement were as follows:
1. Headline intercept strong enough to be a discovery hole - 30m at 1.8g/t is strong enough to declare a discovery hole. Especially considering Capricorn’s Mount Gibson project has an average grade of 0.8g/t across its entire resource.
2. Shallow depths of ~25m - shallow is good because it could mean lower mining costs if the discovery grows into something that is economically viable to develop.
3. Distance from a major existing project - This is the big one, BPM’s asset is next door to (literally next door) $2.4BN Capricorn Metals. BPM’s discovery being right next door to a majors development asset adds a lot of strategic value to the project.
What do we want to see next?
On its own today’s intercept is pretty strong, but we want to see BPM extend and show to the market that it isn't an isolated intercept.
BPM already has 6 RC holes completed targeting the “downdip extent of” today’s intercept.
Results from the RC holes are pending and BPM is already planning for a phase 3 drill program.
IF BPM can show that the gold mineralisation extends at depth and along strike then it could morph into a discovery that the market values a lot more than BPM’s current market cap.
Bonus options also on the way…
We also noticed in today’s announcement that BPM is planning an option entitlement issue.
This would see BPM offer existing shareholders ONE new option for every THREE BPM shares held at a record date (that is not yet determined).
The new options would have an exercise price of 10c per share and a four year expiry + BPM said that they would look to have the options listed.
We think these options are a lot more interesting now that the BPM share price is above 10c per share and the company could potentially have made a strong gold discovery.
We think that with RC drill results pending from Claw and the option entitlement offer to come selling pressure on market could be a lot lower than otherwise expected after a big rally like today.
