REX MINERALS You've got to feel sorry for Lihir Gold (ASX: LGL) boss Arthur Hood. Still feeling the heat from the $400 million loss at the group's failed Ballarat gold project in Victoria, Hood now has to wear the embarrassment of selling out of Rex Minerals (ASX: RXM) two days too early.
Lihir injected some Victorian exploration ground into Rex as part of the original Rex float and got 7 million Rex shares in return. It sold them last Wednesday for $5.39 million or 77¢ a share to Melbourne-based funds manager Eye Investment. By Thursday's close, Rex had moved on to 96¢ a share. But worse was to come on Friday, from Hood's point of view that is.
A new batch of drill results from Rex's Hillside copper/gold project on South Australia's Yorke Peninsula put a rocket under its share price. By the close of trade on Friday, Rex had soared 46 per cent to $1.40 a share. In effect, Lihir missed out on an extra $4.4 million by deciding to sell when it did. And it is not as if Lihir needed to cash in its Rex chips for any particular reason.
As for the Rex drill results, they were impressive all right. Sixty metres grading 3 per cent copper and 0.5 grams of gold a tonne from a depth of 280 metres is hard to ignore. But it won't be until the market knows just how big the mineralised system at Hillside could be that things will get really interesting.
To that end, there was a clue in Rex's Friday announcement that additional information on Hillside's size potential is close at hand. It said high-resolution magnetic data had been collected over the project area, along with down-hole electromagnetic surveys.
The information is now being processed and the final data will be announced as the results are returned over the coming weeks. It is safe to assume that, by now, Rex would have a feel for what the data is pointing to.
The fact that Friday's announcement flagged the pending release of Rex's interpretation of the data suggested to most around town on Friday that there is more good news on the way. Bad luck Arthur.
LGL Price at posting:
$2.49 Sentiment: None Disclosure: Not Held
