Drilling Begins: Could LNR Strike Gold in WA?
Small-cap explorer Lanthanein Resources kicks off drilling next to historic 1.3Moz gold mine, while adding $2.4m to its books
Lanthanein Resources (ASX: LNR) just dropped a double shot of news that makes their $7 million market cap look seriously interesting.
First up, the drills are finally turning at Lady Grey in WA's Yilgarn Province. They're hunting for gold right next door to where the Bounty Gold Mine produced 1.3 million ounces. And with gold prices up 30% this year and hitting all-time highs last month, the timing looks sharp.
Second, LNR just pulled off a smart move that most small-cap explorers would kill for - they've banked $2.4 million cash less costs from the sale of shares in another company.
Let’s run through our maths - LNR trades at just 0.3c per share with a $7 million market cap. After banking $2.4 million from the PNG sale, they're sitting on roughly $5 million in cash. That leaves an enterprise value of about $2 million - with a fully funded drill campaign already underway that, if successful, could quickly multiply LNR's valuation.
This drill campaign is no shot in the dark. It's targeting gold anomalies identified through electromagnetic surveys conducted earlier this year, and they're drilling from an existing historical access road.
This means drill cores will be in the lab for processing quickly, and we won't have to wait long for results.
Better yet, this ground has never been drilled before, giving LNR its first crack at what could be hiding beneath the surface.
As investors, we see this drill campaign as a free shot at the stumps. If it comes off and we discover another Bounty Gold mine, fantastic. If we don't, the company is in a great financial position to acquire a new asset.
And LNR has done the work to make every drill hole count.
Gold Hunt Begins: LNR's Strategic Drill Program
LNR's commencement of drilling at the Lady Grey Project, located within the renowned Mt Holland area in Western Australia's Yilgarn Province, is a huge step for the company.
Focusing on gold, a commodity that's been on a tear this year, on a highly promising, previously untested target is what gets us excited as small-cap company investors.
The Lady Grey drilling program is not just a shot in the dark. It's backed by advanced technology called MLEM surveys, which help pinpoint areas most likely to contain valuable minerals, making the exploration more focused and efficient. This should instil confidence in investors about the company's well-thought-out strategy.
What makes this project exciting is that advanced technology has identified a critical underground target that matches up with gold found in earlier soil tests. The initial phase includes reverse circulation to 150 metres, followed by diamond drilling to a depth of 600 metres.
This targeted drill campaign off existing historical roads will quickly show whether follow-up drilling is required and if LNR is onto something much bigger. For investors, this modern, precise approach increases the chances of a significant discovery and highlights the company's smart strategy.
Next Door to a Million Ounces: The Bounty Mine Connection
Looking at the bigger picture, Lady Grey sits in the sweet spot. It borders the historic Bounty Gold Mine's 1.3-million-ounce operation and is situated in the renowned Mt Holland area in WA's Yilgarn Province - one of the world's premier gold addresses.
What makes the Bounty story relevant is its timing. The mine closed when gold recovery rates didn't meet expectations - back when gold was trading at USD$300 an ounce. Today, with gold at USD$2,600, the economics of gold mining in this region look very different. The area remains highly prospective, with multiple gold deposits already identified and geological similarities to other significant discoveries in the region.
Despite sitting next to such significant gold production, LNR's ground has never seen a drill bit. It's rare to find untested ground in such a prolific gold district, especially when modern exploration techniques are showing such promising indicators.
Cash Position Puts LNR in Strong Position
The PNG asset sale shows this management team knows how to play the game. That $2.4 million (before costs) gives LNR options.
If the drill bits hit something significant, they've got the cash to follow up aggressively. If not, there's plenty in the bank to pursue other opportunities. This kind of financial flexibility lets companies create value without having to come back to shareholders with hat in hand.
This drill campaign isn't make or break for LNR, and that's what we like to see. It demonstrates a management team thinking beyond just the next drill hole.
Why This Matters for Investors
We've been waiting for this moment since backing LNR in May. The drills are turning, the bank balance is healthy, and the technical setup looks strong.
As always, let's be crystal clear - early-stage exploration is risky. While we're excited about LNR's prospects, we always encourage readers to do their own research and understand the risks before investing in any small-cap explorer.
For now, the talking stops, and the drilling begins. We're watching closely.