The other day Kentor Gold released their long awaited Jevois Resource Statement Upgrade. Management had previous indicated that it would be released in December 2011, but there were a few delays at the lab and it was pushed back a few weeks.
The announcement was met by a brief rally in the share price (to 14 cents) that lasted maybe 10 or 15 minutes at most. I have previously indicated (on HotCopper) that I though this announcement may have been able to push the share price to 15 cents and beyond. Clearly I was wrong in this instance. I think this is largely due to the fact that short term holders took the opportunity to sell into the news. This would also have been compounded by those who are growing a little bit “nervy” about the Andash announcement that should be forthcoming in the next 3-4 weeks (based on the latest comments from management).
Anyway the resource upgrade was quite strong, especially when you consider that it was only based on the Reward and Bellbird Prospects. The total inferred resource increased to 11.9 Mt @1.3% copper for a total of 150,000 tonnes (33% increase) and silver came in at 9.66 million ounces (27% increase). The cut-off grade was 0.5% Cu.
In addition there is further exploration potential for both the Reward and Bellbird deposits in areas adjoining the current Inferred Resource. This totals to anywhere from 50 to 100,000 tonnes of Copper and 3 to 5 million ounces of Silver. The deposits are open at depth and there are additional possibilities along strike from the deposits based on interpretation of the recently completed detailed conductivity survey.
Given the lack of buying action on the back of the announcement it seems the markets focus is still well and truly on Andash. I believe this was change over time with the Managing Director, Simon Milroy stating that the results “have lifted Jervois to a new scale of potential development.”
We also have further upside to the resource statement as gold was not yet included in the estimate and grades also appear to be increasing at depth. Additional drilling is also scheduled to commence in March with a further 8,000 m RC and 3,000 m of diamond drilling designed to take place.
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