DOT Desk: Caracal Gold (LON: GCAT) is up 23% yesterday morning on their announcement to the London Stock Exchange that they’ve found further high grade mineralisations at their mine in East Africa, reports Dhaka Tribune.
The mineralisation is high grade too – 3 and 4 grammes of gold might not sound like all that much but by modern standards for gold ore that is rich material. On the other hand it’s worth recalling that Caracal is a small, small, company with limited output of gold. This increases the corporate valuation, certainly, but this also isn’t the discovery of some vast new deposit which catapults the company to the heights,
Caracal share price from London Stock Exchange While announcements of more gold in a gold mine are always of value it’s necessary to remind ourselves of what is happening here. Caracal is not out exploring for some new Tier 1 deposit, nor is it even claiming to be doing so. Instead the aim is to exploit, thoroughly, already known to be extant but rather small scale workings. This announcement today is not of some vast expanse of material that can be mined. Rather, it’s that at the scale of the operations – the aim is to be producing 1,000 oz Au a month (around, roughly, $2 million of material a month) – being undertaken they’ve confirmed the presence of high grade material that can lead to that sort of level of production.