Why the Aurumin (ASX:AUN) share price is exploding 42%

The gold miner has announced exciting new drilling results.

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The Aurumin Ltd (ASX: AUN) share price has struck proverbial gold. That's after the company announced the striking of literal gold at its mine in Western Australia.

At the time of writing, shares in the company are trading for 23.5 cents each – up 42.42%. That comes despite the ASX All Ordinaries Index (ASX: XAO) being 0.16% lower.

Let's take a closer look.

Aurumin share price rockets on drilling results

In a statement to the ASX, Aurumin released the results from "high-grade" drilling at its 100% owned Mt Dimer Project in WA. Drilling occurred at 7 different sites in the mine. Highlights include:

  • a 4.0m wide ore at 48.7g of gold per tonne.
  • a 5.0m wide ore at 19.3g of gold per tonne.
  • an 8.0m wide ore at 5.70g of gold per tonne.
  • a 4.0m wide ore at 2.76g of gold per tonne.

The company says future drilling "will aim to continue extending" the deposits at the mine. Investors are clearly excited by the company's prospects, judging by the rising Aurumin share price.

Management commentary

Aurumin Managing Director Brad Valiukas said:

This is a tremendous intercept at the historically high-grade Mt Dimer production centre. These latest results both extend known mineralisation and progress T12 towards being declared a new deposit, further supporting our view of Mt Dimer having potential for multiple high-grade open pits.

We are continuing to improve our understanding of the Project and these results support our revised interpretation of lithology, fluid pathways and prospective areas. Drilling is planned to recommence at Mt Dimer next month as we look to follow up these high-grade intercepts and increase the value of the Project.

Gold spot price history

Gold is currently trading for US $1,814.05 per troy ounce on the commodities market. It's up 1.3% this week but down 4.35% since the beginning of the year.

According to the website Trading Economics, the gold price is forecast to fall to about US $1,790 per troy ounce by the end of the quarter. The website excepts the price of gold to sink to an even lower $1,720 in 12 months' time.

Aurumin share price snapshot

Over the past 12 months, the Aurumin share price has fallen 20.7%. Year-to-date, it's depreciated 16.7%.

The company has a market capitalisation of $14.3 million.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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