Come on guys I wouldn't get too excited about share price movements on just a few hundred thousand shares although you are right about one thing, Musgrave is too small to have much interest for the likes of Barrick and you have to wonder why they remain on the register. Independence and Silver Lake would have to submit a change in substantial shareholder notice if they were selling.
The share price went from 8.0 cents to 8.7 cents on Thursday on just 239,234 shares and from 7.8 to 9.3 cents on 16 March when 1,211614 shares traded. I understand RW had been talking to brokers earlier that week.
What this tells you is that if the next lot of assay results continues to build on the "exceptional" results to date and some real buying interest emerges the share price could be back at its 12 months high of 13.0 cents in a flash. Brokers will start to look at the stock more closely and maybe even recommend it to clients. Patersons who raised cash for Musgrave last year needs to step up to the plate on more positive assay results, they haven't done much for their client so far.
Problem for RW is how do you top "exceptional" and "fantastic" (media release of 17 March). He could say Musgrave is sitting on the most significant new gold discovery in the Murchison in recent years but he is a pretty conservative bloke and is not going to put his credibility on the line until he knows for sure that the company has really discovered some major ounces. The first resource estimates is scheduled for late in the June quarter.
Given that he is not into hyperbole per se, for RW to describe the assay results from the first four holes, three successful one not, as exceptional and fantastic suggests they are pretty damn good. I don't think they they couldn't have asked for anything better particularly at Lena where they got two intersections in fresh rock below the existing oxides. That has to get you excited.
They are working in a very prospective area,and with all the current drilling focused on Lena and BoD you know that this is the first prize they hope to win of several other known potential prizes along the shear zones. Drilling there will continue after a short break once the current 44 holes are completed. To be already committed to a second round of drilling before the results of the current drilling has been fully assessed is a huge positive IMO. It just demonstrates the number of targets that they have at Lena/BoD.
The company is going to need a cash top up pretty soon and I know RW would like to see the share price at higher levels before rattling the tin again. So we might see several more assay results before the next equity raising.
With so many holes going down it is inevitable that some assay results will disappoint but for my money Musgrave looks to on to something of a decent size. Silver Lake had a resource estimate of 90,000 ozs at Lena and BoD before Musgrave entered the play. You would have to think Musgrave's drilling success, which continues, has at least doubled that with the possibility that further drilling will demonstrate 200,000 ozs is only the start.
I expect the next set of assay results to be announced next week and then further results to flow over the next six to eight weeks.
Here's hoping Musgrave is onto a serious (sirius) new gold discovery.
MGV Price at posting:
8.3¢ Sentiment: Buy Disclosure: Held
