Money continues to flow into gold plays

Gold-focused exchanged traded funds (ETFs) have been flooded as investors flee uncertain markets to their favourite safe haven asset.

This is highlighted by ETF Securities’ pure play gold ETF – ETFS Physical Gold (ASX:GOLD), which has seen its assets double to $2bn in less than a year.

ETFs are similar to managed funds but can be bought and sold through an exchange such as the ASX.

Not all of that money is going the way of ETFs though, with Aruma Resources (ASX:AAJ) receiving firm commitments for a $2.7m placement priced at 0.4c per share to fund accelerated exploration and drilling across its five Australian gold projects.

This will be centred on its Saltwater and Melrose projects in Western Australia’s Pilbara region where preliminary works have identified indicators of potential gold mineralisation.

Drill ready targets have also been defined at Melrose just 5km north of Northern Star Resources’ (ASX:NST) Paulsens gold mine that has historically produced more than 1 million ounces of gold.

Aruma will also carry out first-phase exploration upon granting of licences at the Scotia South project in WA’s Eastern Goldfields region and the Capital project in New South Wales.

Meanwhile, Redstone Resources (ASX:RDS) has completed a $750,000 placement at 1.4c per share to evaluate the recently acquired HanTails project just 15km south of Kalgoorlie.

HanTails is a large-scale gold tailings storage facility located on the historical Hannans South gold mill site.

The company plans to carry out aircore drilling and sampling to establish the average gold grade and approximate gold endowment within the tailings facility.

AAJ and RDS share price charts

 

High-grade gold sparks market excitement

On the exploration front, investors cheered Laneway Resources’ (ASX:LNY) intersection of up to 60 grams per tonne (g/t) gold from drilling at the Sherwood deposit within its Agate Creek project in north Queensland.

Shares in the company rose 11.11 per cent to 1c on the remaining results from the drilling that will assist in finalising the pit design and increasing the high-grade ore than can be mined.

Notable results are 6m at 11.4g/t gold from 49m, including 1m at 60.06g/t gold, and 6m at 10.5g/t gold from 28m, including 2m at 28.73g/t gold.

Pit and mine plan remodelling has begun, with an updated pit design and mine plan to be completed over the next two weeks.

The company will then finalise mining contractor, ore transportation and processing arrangements.

Ore from Sherwood, which has a resource of 205,000 tonnes grading 5.5g/t gold, could be toll treated through one of several third party conventional carbon-in-leach mills in the district.

Cash flow from this mining campaign is expected to underpin additional exploration and appraisal of the broader Agate Creek project.

Laneway Resources (ASX:LNY) share price chart

 

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