Drilling results from ASX explorers can send them surging or plunging! So here are 4 key things investors need to look for

Drilling results from ASX explorers are seen on the Market Announcements platform each day. Why do some results cause some stocks to rise anywhere between 20% and 200% while others can see it go crashing? Well, obviously because some are good and some are not, but what exactly separates the good results from the bad? We’ll look at this question.

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What to look for in drilling results from ASX explorers:

1. Grade

This is the most important consideration, at least so far as determining the short-term direction of the share price is concerned. Each commodity has its own thresholds for what is considered high-grade or not.

For example, anything above 5g/t would be considered high-grade for gold whilst anything below 1g/t would be low-grade. In respect of uranium, anything below 1,000ppm would be low-grade, whilst anything in five figures ppm would be high-grade. For lithium, anything above 1.5% is considered good. For copper, anything >1% is high grade and whilst 0.2-0.5% is considered low-grade, it may still be economically viable in porphyry deposits.

But of course, grade must always be interpreted relative to all other considerations, particularly the deposit type, depth and the factors mentioned below.

2. Depth

It is all well and good to get a good drilling hit, but it is a lot harder to extract the resource if it is far below ground. At the exploration stage, most ASX explorers won’t have done much economic modelling (if any), although it would not be unreasonable to assume that it would be costly to extract a resource that is well below the ground. It may well be that a 20g/t result from gold could be economical at even a 400m depth, but still much costlier at a deeper depth. It is arguable that it’d be better to receive a 10g/t result at surface level.

Once again, there’s no ‘one size fits all’ for each commodity, although when you hear the term ‘at surface’, it means it is close to the surface. Please note that ‘surface mining’ is different to exploring for resources and finding ‘at surface’ results. The former term may be a deep, operating mine, although one where the resource is accessible.

3. Purity

The ‘cleaner’ (i.e. free of impurities) any concentrate or any mineral, the better the margins. This is both because the producer will see lower costs, but also because of the higher prices that will be paid by the downstream processor. Even before you consider eventual production, wet and compromised samples can mean these results may not ultimately be used.

There are varying degrees to which purity matters in various commodities, and even then there are differing limits. In iron ore, a higher iron % (i.e. over 60%) is more valuable. But in lithium pegmatites, the presence of iron can make the concentrate unsellable. In graphite, a higher carbon grade is better but flake size distribution matters too.

4. Continuity

Essentially what we mean here is that it is all well and good to have one or two good holes, but little use if they are far apart and no other drill holes in a set of results are good. It is also important to note the width of any interceptions.

Look for consistent grades across multiple drill holes, thick or repeated mineralised zones, and predictable geometries (e.g., consistent veins, porphyry halo, pegmatite swarms). In individual sets of drilling results, look for wide intercepts (i.e. at least 50m), multiple stacked zones and a long strike length.

Continuity is a non-negotiable requirement to form a resource estimate.

Other considerations

Those four points above are key to determining the direction of an ASX explorers’ share price.

All of today’s major miners on the ASX all started as small cap explorers in one decade or another, and virtually all of today’s explorers want to follow in their footsteps.

But the harsh reality is that the odds are stacked against most other explorers today. At the same time, there have been recent examples of large scale mines being discovered by ASX small caps, all starting with one good set of drilling results – such as Nova-Bollinger which was discovered by Sirius Resources in 2012 as well as the more recent Julimar and Kathleen Valley discoveries.

Recent examples of good exploration results

Let’s look at a few examples from 2025. One was Kalgoorlie Gold (ASX:KAL) which back in February announced a new discovery at the Lighthorse prospect at the Pinjin project in WA. It recorded a first-pass aircore drilling result of 17 m @ 4.81 g/t Au from 48 m, and 8 m @ 9.21 g/t from 52 m and shares made a weekly gain of over 400%. The results were far from the highest-grade (remember we said >5g/t is high grade with gold), but the intercepts were relatively shallow, reasonably thick, and on a “blind” target (no prior drilling) — suggesting a potentially large, previously undiscovered gold system.

In August, Tambourah (ASX:TMB) released drilling results from its “Beatty Park South” aircore drilling: a standout intercept of 6 m @ 25.8 g/t Au from 30 m, including 1 m @ 126 g/t Au. Then in September, a result of 2 m @ 49.7 g/t Au from 50 m, including 1 m @ 97.6 g/t. Now this is high grade for gold. But of course, this was just a couple of hits.

The flip side

Now let’s look at a ‘bad’ result. Metal Hawk (ASX:MHK) plunged in July when it released drilling results. Intercepts included 1 m @ 1.6 g/t Au (from 11 m), 1 m @ 3.5 g/t (from 57 m). these intersections were extremely narrow (1 m), shallow (but narrow), and lacked any thick or continuous zones. Reliance on multiple very narrow hits rarely excites investors, especially compared to a wide intercept — grade × width is too small. A high-grade “1-metre nibble” rarely translates to a mineable deposit — without broader zones, continuity, and tonnage, shares often tumble.

A recurring theme in junior resources exploration is “bonanza grade” but very narrow intercepts (e.g. 1 m @ 5–10 g/t), or deep irregular veins. These draw initial interest, but if follow-up drilling fails to show continuity/width, the market quickly adjusts — sometimes sharply down.

Market participants often expect multiple, thick, or repeatable intersections — without those, even “good” intercepts can be re-rated as economically dubious.

Conclusion

We think there are 4 key takeaway points for investors looking at drilling results from their ASX-listed junior explorer:

• Don’t just look at grade — always weight by width and continuity. A 1 m hole at 5 g/t can sound good but often ends up being useless.
• Wait for follow-up drilling before getting excited. One hole ≠ a deposit. Consistent results over multiple holes are what define a viable resource.
• Be especially cautious with small-caps / micro-caps. Volatility is amplified — drops of 40–50% on underwhelming assays are common (Remember the fate of Metal Hawk).
• See “metal-in-ground” not just “headline grade.” Think in terms of grade × width × strike/extent — that’s how real resource potential emerges, not from bonanza-grade flukes.

By taking into account the above points, investors should at the very least have clarity as to why their company’s share price is moving the way it is in the aftermath of drilling results – particularly if it is moving down even in spite of management claiming the results were good.