Enthusiasm for Breaker a test for explorers
7 January 2017
The West Australian
As the recovering gold price puts a rocket under the value of listed Australian producers, Breaker Resources is about to test whether the recovery in sentiment extends to exploration plays.
Breaker shares tipped back over 50 yesterday, putting subscribers in last September’s $12.4 million capital raising back in the money for the first time since late October.
The rising gold price has helped, but Breaker is also due to release the results of the next round of drilling at one of the State’s most intriguing gold discoveries – the Lake Roe project, on the salt flats 100km east of Kalgoorlie.
The project has been one of the most watched by industry.
There is no doubt there is gold along Lake Roe’s 4.4km strike length. But Breaker’s methodical approach to exploration – spacing early drill holes wide apart and running them very shallow, rather than chasing big-hit hero holes early on – has contributed to a strongly divided opinion among market watchers.
As the drilling has progressed some of the project’s early doubters have begun to turn.
Two years ago, before it launched into Lake Roe full-swing, Breaker shares were worth 2.4. They hit a high of 76 in September before sagging in the wake of the capital raising and as the gold price fell.
Results from the latest drilling campaign, released in December, show some impressive hits.
Best results from the southern part of the project include 52m at 3.13g a tonne gold, including a 1m intersection grading 91.66g/t.
And hits from the northern section of Lake Roe included best hits of 39m at 3.22g/t gold, including a 12m intersection grading 5.23g/t.
Breaker has more assay results due from that campaign shortly, which can partly explain this week’s share price rise as believers top up on its stock ahead of a results announcement due next week.
Good results will test whether the renewed positive sentiment for gold stocks extends to explorers, setting a tone for the early part of the new year.
And there is likely to be more to come. If there really is a big deposit below Lake Roe it is likely to be found in the fresh rock below the lake bed.
To date Breaker has focused on relatively shallow reverse circulation drilling.
But next week a diamond drill rig arrives at the project, which will allow Breaker to properly test its hopes that a deposit of truly significant size lies beneath the salt flats at Lake Roe.
Breaker shares closed at 50 yesterday, up 3.5 or 7.5 per cent.