Good run on this stock last week after very positive announcement of a 240% resource upgrade. Hit high of 70 cents on Wednesday pulled back on Thursday. Good review in mining news as well as The Australian last week. Had another positive story today in the Australian. Might be worth another look tomorrow doesnt look like much selling pressure and the good press will probably create some interest.
CAPITAL Mining sure picked the wrong place if it wanted the investment world to hear all about its plans.
How one in Canberra can hear anything above the din emitted from Parliament House is a matter not for debate. But the recently listed explorer made just enough noise last week for it to become one of the favourites among the multitude of mining stocks on the share market.
On Tuesday, Capital Mining upgraded its Chakola resource by 240 per cent from 88,000 ounces of gold equivalent to 300,000 to a depth of 70m.
Chakola is Capital's stand-out asset among its base metal and rare earth tenements and sits about 15km north of Cooma in a central position on the Lachlan Fold Belt. That formation plays host to Newcrest's Cadia-Ridgeway projects and Rio Tinto's Northparkes copper play.
Capital had been working the largely unexplored ground there for six years before deciding to go public and raise $3.4million in a March listing.
Chairman Richard Hine picked up the ground in 1997. Capital managing director Rob McCauley said Chakola was a project that a junior miner dreamt of: small scale and with a low risk/reward ratio.
"We are getting 80 to 90 per cent recovery rates," Mr McCauley said. "In a couple of years from now, the market will be trying to sort out the explorers from the producers and I would like to think we would be in the latter category."
Of the resource upgrade, 214,000 ounces of gold equivalent is in the measured and indicated categories under the JORC code.
In its prospectus, Capital listed the Harnett resource as a JORC code compliant 1.1 million tonnes at a grade of 2.7 grams per tonne of gold for 35,000 ounces of gold and 6500 tonnes of copper.
It said that the threefold lift in tonnage to 3 million tonnes was because of increase in mineralisation within its boundary and the addition of mineralised intersections from historic holes at Harnett South.
The resource upgrade is near 400 per cent if the open-cut potential to 100m depth is included.
"The information in the prospectus was the available data we had at the time, which was going back to October," Mr McCauley said. "We had to issue a supplementary prospectus because we went over the three-month threshold, which did flag we were working on upgrading the resource."
But while the gold and copper hits were surprising enough, Capital adds that the mineralisation is open to the north and at depth for zinc. "I think, with us, you will find that we surprise on the upside," Mr McCauley said. "I would imagine that we would be able to get a lot of gold out on a gravity basis and there is the technology to liberate the zinc."