LIKE many gold exploration plays, Chesser's share price has been heading south, to the tune of 20 per cent in the past six weeks as investors desert higher-risk stocks in the face of global uncertainty.
But Under the Radar's followers should look out for a big announcement any day now that could boost Chesser's fortunes.
At 50? a share, Chesser Resources (ASX: CHZ) has a market cap of $70 million. This is a miner that could end up being many multiples of this.
Chesser is coming out with its much-anticipated "resource" in the next few days.
A resource is a big deal, and is basically a calculation of the ore body (measured in tonnes) multiplied by the average grade of drilling samples. It's an even bigger deal in the type of epithermal gold system found at Chesser's Kestanelik project in Turkey.
It has similar geology to Andean Resources' principal asset, Cerro Negro, located in Argentina. Andean never produced an ounce of gold. It drilled for six years and produced a resource of 3.1 million ounces, and was taken over by Canada's Goldcorp in 2010 for $3.6 billion.
The indications are that Chesser's initial resource could be in the region of 500,000 ounces, which is based on only seven of the 80 veins of gold that it has identified.
The company continues to drill and is aiming to put together a resource of 1.2 million ounces by the end of the year, which could support a 100,000-ounce-a-year mine for 10 years.
African miners are also ones to watch.
As I mentioned in last week's missive, watchers of West African miners are in for a feast of drilling data that is long overdue.
One is Castle Minerals (CDT), which is known as a gold explorer in Ghana. Last week it announced some good results on the gold front, showing strong intercepts, but on Wednesday it also announced some very good graphite drilling results.
Every digger and his dog is on the lookout for a graphite deposit, in the wake of a price that has more than doubled in the past four years.
Its usefulness is being appreciated by the Chinese, among others, for industrial applications. Graphite explorers Talga Gold (ASX: TLG), Syrah (ASX: SYR) and Archer (ASX: AXE) are all five to 10 baggers so far this year.
After the graphite music stops and graphite's price stops climbing, those that remain will be the deposits with high grade and are of sufficient size to justify production.
Castle Minerals is reviewing work done by the Russians in the 1960s and it could well be that this one ticks the economic box.
Bassari Gold (ASX: BSR) also announced some interesting drilling results at its Konkouto prospect in Senegal. It is very early stage for these guys, though, with a market cap of just over $30 million. Still, you have to be in it to win it.
Richard Hemming (r.hemming@undertheradar
report.com.au) is an independent analyst who edits THE fortnightly newsletter
undertheradarreport.com.au.
Frequently Asked Questions about this Article…
What’s the latest on Chesser Resources (ASX: CHZ) and why are investors watching it?
Chesser Resources is a gold explorer whose share price has fallen about 20% in the past six weeks, trading around 50¢ with a market cap near $70 million. Investors are watching because the company is about to release a much‑anticipated gold resource for its Kestanelik project in Turkey, and a positive resource announcement could materially change its prospects.
When will Chesser announce its Kestanelik gold resource and what does a ‘resource’ mean?
The article says Chesser is coming out with its resource in the next few days. A ‘resource’ is the calculated amount of an ore body (tonnes) multiplied by the average grade from drilling samples — an important step that helps investors and miners understand how much metal may be present.
How big could Chesser’s initial gold resource be and what are the company’s targets?
Indications in the article suggest Chesser’s initial resource could be around 500,000 ounces based on drilling from seven of the 80 veins identified. The company aims to build a resource of about 1.2 million ounces by the end of the year, which could potentially support a 100,000‑ounce‑per‑year mine for roughly 10 years.
Why is the geology at Kestanelik significant for everyday gold investors?
Kestanelik is an epithermal gold system, and the article notes its geology is similar to Andean Resources’ Cerro Negro project. That comparison matters because Andean’s Cerro Negro yielded a large resource (3.1 million ounces) and led to a takeover by Goldcorp, illustrating how a promising geological system can attract major buyer interest.
What recent news came from Castle Minerals (CDT) and why does graphite matter?
Castle Minerals, a gold explorer in Ghana, announced strong gold drilling intercepts and very good graphite drilling results. Graphite matters because its price has more than doubled over the past four years and it’s in demand for industrial uses, so successful graphite discoveries can be valuable for explorers.
Which other ASX miners are highlighted as ones to watch in the article?
The article highlights graphite explorers Talga Gold (ASX: TLG), Syrah (ASX: SYR) and Archer (ASX: AXE) as strong performers (described as five‑ to 10‑baggers so far this year). It also mentions Bassari Gold (ASX: BSR) for interesting early‑stage drilling results at its Konkouto prospect in Senegal.
What caution or context should everyday investors keep in mind about these exploration plays?
The article implies exploration stocks are higher‑risk: Chesser’s share price fell as investors moved away from risk amid global uncertainty. Resource announcements and drilling results can be catalysts, but they don’t guarantee production or takeover outcomes—further drilling, feasibility work and financing are typically needed.
Who authored the article and where can readers find more commentary from that analyst?
The piece was written by Richard Hemming, an independent analyst who edits the Under The Radar report. Contact details in the article include r.hemming@undertheradarreport.com.au and the newsletter website undertheradarreport.com.au.
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