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Egan Street Resources identifies further high-grade gold at Rothsay project

Infill drilling included deeper holes targeting the inferred zone of the current resource.
Picture of mine site and drill rig at Rothsay
The Rothsay resource stands at 307,000 ounces at 10.9 g/t gold

Egan Street Resources Ltd (ASX:EGA) has released additional high-grade drilling results from its Rothsay Gold Project in Western Australia.

The results will be part of a resource update expected in April and will be followed by a definitive feasibility study due for completion in the second quarter of 2018.

Inferred zone of current resource targeted

The results are from four diamond holes drilled as part of an infill and extension program.

This was at the key Woodley’s and Woodley’s East Shears where infill drilling included deeper holes targeting the inferred zone of the current resource.

The Rothsay resource stands at 307,000 ounces at 10.9 g/t gold.

High-grade hits continue

Some of the better drilling results included 1.5 metres at 11 g/t gold and 1.2 metres at 11.2 g/t gold.

The production target based on a pre-feasibility study released in May 2017 is 200,000 ounces from 936,000 ounces at 7.0 g/t gold.

Low capital cost project envisaged

However, recent drilling has increased confidence around the geological features of the mineral resource.

Based on these developments, the company is looking to model a potential near-term, low capital intensity opportunity to start mine development and gold production.

Share price target implies upside of 130%

Taylor Collison analyst Lachlan Rutherford is bullish on Egan Street with his price target of 62 cents implying upside of 130% to its current trading range.

When Taylor Collison initiated coverage in March, he said: “Rothsay has the potential to deliver a +1Moz resource in due course which along with the high grade makes it an outstanding project.”

Multiple share price drivers

Rutherford sees upcoming potential share price catalysts as exploration results, an updated mineral resource, completion of the definitive feasibility study and financing discussions.

He expects all of these developments to occur before September 2018. 

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