Algold Resources Ltd. (TSXV: ALG) announced additional high-grade drill results from the higher-grade Eleonore zone at its Tijirt Property in Mauritania.
Results were highlighted by 39.85 g/t Au over 6 m (T16RC071) which included 2m at 112 g/t Au. These results continue to suggest that the Eleonore zone
is a higher-grade target, and has three distinct zones. In our view, this 3.1km, higher-grade zone which only made up ~9.5% of the overall resource
is likely to be the main driver of resource growth with the pending update. We expect the pending resource update to support Algold’s current valuation
while being a positive catalyst for the share price as the next leg of exploration success is priced in.
Exploration success has returned the share price. Algold still trades at a premium to peers at C$143/oz versus other West African peers
at C$49/oz. This essentially implies the market is expecting the resource to grow by ~2.9 times from the recent update (~790k ounces), which appears
to be mildly conservative, based on the size and quality of the targets being explored. We believe that the pending results from Phase 1 (drilling
complete), the upcoming results from Phase II drilling coupled with the updated resource later this year should justify Algold’s valuation and likely
provide continued momentum for the share price.
Company Description: Algold Resources Inc (TSXV:ALG) is an early stage West African gold exploration company that controls meaningful
land packages to the North and South of Kinross Gold’s (TSX:K, NYSE:KGC) Tasiast mine in Mauritania. The team includes Benoit La Salle (Chairman) a
founder and former CEO of SEMAFO and Francois Auclair (President and CEO), who was the General Manager of Tasiast during its early stages of development.
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