ActivEX (ASX:AIV) finished yesterday up 185% all thanks to a 310koz gold resource

ActivEX (ASX:AIV) investors had a spectacular day yesterday. Any investor in a company that gained 185% in a day will always be able to say that. But for this company, there was a particular reason why it gained. Namely, a JORC compliant mineral resource estimate at its project, the Gilberton Gold Project in northeast Queensland.

ActivEX and its Maiden Gold Resource

ActivEX’s project is named after the broader district and is 300lm west-northwest of Townsville. It has focused on an area called Mt Hogan that is a historic gold mine. Not a large one, but it is the largest historical gold producer in the district.

The company has been listed for many years and has had a number of projects in northern Queensland over the years. It has had little success, at least if you define success as finding a big resource and developing it into an operating mine. Until now.

ActivEX has done drilling at Mt Hogan for a number of years and has exclusively focused on it since 2022. Yesterday, it told investors it had defined a Resource of 8.5Mt @ 1.13g/t for 310,000/oz.

Not the highest grade by any means, but a fair amount of ounces. It is no Cadia, but arguably bigger than what many thought this company could achieve.

Sampling was done at a Townsville laboratory and the results were validated by mineral consultancy Auspin using visual validation of surveys, correlation of geological logging against gold assay data and error checking tools in Leapfrog.

A lot more work to do

Of course, there is more work to do. Indeed, the Resource category is only inferred rather than measured and indicated – it is the lowest of the 3 degrees of confidence. If you read the fine print in the JORC, the reason was because the drill holes were clustered and irregularly distributed.

But investors likely think more gold can be found and/or the resource can go to a higher category. ActivEX told investors a new round of drilling would commence by the end of this quarter and its incoming joint venture partner would take over management. And perhaps if it drills in the same area, it will be able to validate the finding.

Moreover, we do wonder if this 185% intraday return would’ve been achieved had it been in any other commodity but gold? Gold is running hot right now and there is no end to the run in sight. And while there is a case to be made for the recovery of many critical metals like lithium, seeing will be believing for many investors after more than 3 years of stagnant prices.

The study talked about the current gold price and fit a cut-off grade of 0.3g/t considering the >US$3,000 gold price. On this basis it said,’ There are reasonable prospects for eventual economic extraction for the Mt Hogan deposit’, but a crash in the gold price could change all that. But ‘investors will believe it until they see it’ applies also when prices are high for an extended period and one speculates about a crash too.

Conclusion

Don’t expect to see ActivEX as a multi billion dollar miner any time soon. But it has something to work with, and that is a fact that couldn’t have been said prior to this news.

Investing in early-stage explorers is no guarantee to work. You can go at it for several years and not have success. But if you have even some success, the returns can be lucrative and investors in ActivEX learned that lesson.

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