Jennings Capital's Kwong-Mun Achong Low liked the look of Minera IRL's (TSE:IRL) first set of underground drill results released this morning from the company's flagship Ollachea project in Peru, as the analyst maintained his buy rating and 12-month target price of $1.50 per share.
All three holes hit significant mineralization, intersecting grades above the current resource grade of 4 grams per tonne (g/t). The weighted average intercept of the three reported holes was 5.0 g/t over 12.9 metres.
Highlight hole DDH13-T01 hit 20 metres of 4.5 g/t gold, 150 metres east of the current resource, and hole DDH13-T03 hit 11 metres of 5.5 g/t gold at a 320 metre step out from the current resource.
Low notes that the strike of potential Minapampa mineralization has grown by more than 30 percent to around 1,200 metres. "We view the opportunity to add ounces to the current 1.4 Moz (M&I) deposit as high," the analyst writes.
He adds that the next steps for Ollachea include the receipt of full permits, the Rio Tinto payment of roughly $7.4 million due in the third quarter, and financing arrangements.
"Despite the positive drill results, the company has stopped drilling for the time being, in order to focus cash and efforts on advancing Ollachea through permitting," Low concludes.
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