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De Grey Mining (ASX:DEG) - Executive Chairman, Simon Lill - The Market Herald
Executive Chairman, Simon Lill
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  • 2020 was a year of highs for De Grey Mining (DEG), which saw its share price hit an all-time high of $1.55 in September
  • The WA mining company first saw its share price increase when it uncovered 84.7g/t gold from its Hemi Discovery in Western Australia
  • De Grey then identified a 1.8-kilometre-long intrusion that remains open at depth and along strike
  • Due to the success at Hemi, many other WA gold companies are comparing their findings to this discovery
  • There's Golden State Mining (GSM), which saw its share price soar after the potential of its Yule Project was realised following the Hemi discovery
  • There's also Raiden Resources (RDN), which identified intrusions at the Arrow Project which are similar to that at Hemi
  • The main focus for De Grey this year is to release a maiden mineral resource for Hemi by the middle of the year
  • According to Morningstar, De Grey shares are fairly valued at 88 cents, however, this price target comes with extreme levels of uncertainty
  • De Grey has ended the day 0.99 per cent in the green with shares trading at $1.02

2020 was a year of highs for De Grey Mining (DEG) who saw its share price hit an all-time high of $1.55 in September.

What's in store for this rapidly growing mining company, and can it follow the success it had in 2020?

What is De Grey?

De Grey is a West Australian mining company engaged in gold exploration and development activities throughout the state.

Its main focus is the Mallina Gold Project in the Pilbara region of WA, where it has made a large-scale discovery named Hemi.

Hemi is an intrusion-hosted form of gold mineralisation, which has not been previously identified in the Pilbara region, with is value-driven by its size and grade continuity.

Additionally, Hemi consists of the Aquila, Brolga, Brolga South and Crow zones.

A major drilling program is now underway at Hemi, with aims of delivering an initial resource in 2021.

2020 share price history

De Grey first saw its share price hit the $1 mark on July 1, but it continued dropping throughout the month, never going higher than 90 cents until mid-August.

After this, the price remained steady, only dropping to less than $1 twice in December.

When De Grey's shares started rising, it was on the back of a high-grade discovery at the Crow zone at Hemi.

The company intersected up to 84.7g/t gold via reverse circulation (RC) drilling that was undertaken to define and extend the mineralisation.

According to Managing Director Glen Jardine, these results demonstrate the potential for significant growth at Hemi.

"[The RC results] demonstrate the potential for Crow to significantly add to the overall gold endowment at Hemi and to meaningfully contribute to a potential large scale, near-surface open-pit production pit scenario," Managing Director Glenn Jardine commented.

Following this, De Grey identified a 1.8-kilometre-long and 80-metre-thick intrusion at Hemi, which remains open along strike and at depth.

A few days later in mid-September, De Grey's share price began its climb after revealing it extended the Falcon intrusion at Hemi.

Aircore drilling extended Falcon another 640 metres to an overall strike length of 2.4 kilometres. It also remains open to the south and measures up to 80 metres wide in some parts.

De Grey has continued its success at Hemi, further extending the gold mineralisation and continuing to define high-grade intersections and mineralisation.

Influence on competitors

Due to De Grey's success at Hemi, many other WA gold companies are comparing their findings to this discovery.

One company is Golden State Mining (GSM), which saw its share price jump 84 per cent after identifying new potential at its Yule Project.

This followed a high-grade discovery at Hemi, where a best result of 44 metres at 5.1g/t gold from 40 metres, including 13 metres at 8.8g/t gold was returned.

"We already have several high priority gold targets for drilling up at Yule and in light of De Grey's recent discovery we are currently expanding on our exploration programs," GSM Managing Director Michael Moore said at the time.

Further, there's Raiden Resources (RDN), which identified intrusions at the Arrow Project that are similar to Hemi.

Arrow lies adjacent to the Mallina Project and recent targeting program conducted by Terra Resources compared Arrow and Hemi.

Using what's known about the Hemi mineralisation, Ternera discovered six priority targets with each containing multiple interpreted intrusions.

Raiden is now reviewing the data to refine priority targets for future drilling programs.

2021 and beyond

The main focus for De Grey this year is to release a maiden mineral resource for Hemi by the middle of the year.

The company will also undertake RC drilling to follow-up anomalous targets in the first half of 2021.

According to Morningstar, De Grey shares are fairly valued at 88 cents, however, this price target comes with extreme levels of uncertainty.

De Grey has ended the day 0.99 per cent in the green, with shares trading at $1.02 in a $1.291 billion market cap.

DEG by the numbers
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