The De Grey Mining Limited (ASX: DEG) share price is ending the week on a positive note.
At the time of writing, the gold developer's shares are up 6% to $1.36.
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Why is the De Grey Mining share price rising?
Investors were bidding the De Grey Mining share price higher today after a media report suggested that the company's Mallina Gold Project was sitting on an extra $3 billion worth of gold.
This followed the release of an update on the Hemi deposit at the project on Thursday.
However, the company has been quick to respond to the article. It is advising investors to disregard it and wait for its definitive feasibility study (DFS) later this year. It said:
The Article is reporting on the Company's announcement released on 15 June 2023 relating to an increase to its Mineral Resource Estimate by 1.1Mozs of gold. The Article was not initiated by De Grey nor was the Company asked for any comments. De Grey has not announced any forecast financial information regarding this resource upgrade. Until the DFS is released (scheduled in the 3rd quarter of the 2023 calendar year) no other figures should be relied on.
What was yesterday's news?
On Thursday, De Grey Mining revealed that its Hemi mineral resource had grown by 1Moz to 9.5Moz, which underpinned a 1.1Moz increase in the Global Mallina Gold Project Resource to 11.7Moz.
In addition, its measured and indicated resources has now increased by 18% to 8.1Moz, with Hemi the star of the show, contributing 6.9Moz.
De Grey Managing Director, Glenn Jardine, commented:
Resource definition drilling completed for the 2023 MRE update at Mallina has succeeded in increasing Measured and Indicated resources from 6.8Moz to 8.1Moz with Hemi Indicated resources increasing from 5.8Moz to 6.9Moz. "The increase in Indicated resources has been aimed at improving the overall Ore Reserve and percentage of Ore Reserves within the DFS production profile. Increased Ore Reserves will further de-risk the project and maximise its debt carrying capacity. The DFS is advancing to plan and due for completion in the September quarter 2023.
Macquarie responded positively to the news. This morning, the broker has retained its outperform rating and $1.90 price target on the company's shares.
Based on its current share price, this implies potential upside of approximately 40% for investors over the next 12 months.
