MARKETS SPECTATOR: Adelaide Resources cries eureka

Shares in Adelaide Resources rose more than threefold today after the copper and gold explorer said its latest drilling results were “exceptional”.

The stock surged 10.3 cents, or 245 per cent, to 14.5 cents at 1523 AEST after Adelaide Resources said exploratory drilling at its Alford West Prospect, about 140 kilometers north, North West of Adelaide, indicates high-grade copper and significant gold deposits.

The company says “high grade mineralisation” exists as deep as 300 meters below the earth’s surface and as shallow as five meters below the surface. The area of exploration, which is known as the copper triangle, has been mined for 150 years.

“These are probably some of the most exciting exploration numbers in Australia this year,” Adelaide Resources managing director Chris Drown told Business Spectator. The potential of the find is such that it may be economic to mine the site even if copper and gold prices were to substantially slide from current levels, he says.

Adelaide Resources 'may have to rattle the tin' for as much as $5 million to fund further exploitation of Alfred West, says Drown.

An ASX company since 1996, Adelaide Resources has traditionally sold stock to fund its exploration and production. At the end of March the company had $2.5 million in cash. It has spent $350,000 on its Alford West drilling and Drown expects another $350,000 will be spent on further drilling at the site.  

Copper at US$3 a pound and gold at about US$1,400 a troy ounce represent historically high prices for the commodities, he says. Further price falls will make a resources grade important and that’s why the company’s announcement today is so exciting, says Drown.