It has been a tough day for Predictive Discovery Ltd (ASX: PDI) shares.
In morning trade, the ASX gold stock is down 22% to 34 cents.
Why is this ASX gold stock crashing?
Investors have been rushing to the exits on Wednesday after the gold miner was hit with some very bad news.
According to the release, the company has been made aware that Guinea's Ministry of Mines and Geology (MMG) has announced the revocation of over 100 exploration permits.
Unfortunately for this ASX gold stock, this includes the Argo and Bokoro exploration permits that it holds.
Permit blow
The company's Argo permit covered an area located 15-20km north of North East Bankan (NEB) along the major gold structural corridor that represents the western margin of the Siguiri Basin.
Management has previously stated its belief that Argo has excellent potential to host significant gold deposits. Multiple targets have been defined which mainly occur along three anomalous auger trends. Drilling at Argo commenced in mid-2023 excellent results have been received from multiple targets. Whereas the Bokoro permit forms part of the Bankan licence area which covered 356km2.
The ASX gold stock notes it has not received any formal communication from the Guinean government on the matter. However, it intends to work diligently to appeal the revocations in accordance with the Mining Code.
Some good news is that the 100 revoked permits did not include the Kaninko and Saman exploration permits that are the subject of the Bankan Gold Project's exploitation permit application and contain 5.38Moz of the overall 5.53Moz Mineral Resource. The loss of these permits would be an almighty blow. Especially given its belief that the Bankan Gold Project is a potential Tier-1 gold mine.
Commenting on its recent discussions with regulators in Guinea, the ASX gold stock:
PDI has been collaborating closely with the MMG in Guinea to complete the review process for the Bankan exploitation permit application. The application has recently made further progress. It was reviewed by the MMG's Comité Technique des Titres (Technical Committee of Titles) last week and we understand that the application has been transmitted to the Commission Nationale des Mines (National Mining Commission) in accordance with the process set out in the Mining Code.
This once again demonstrates why miners operating in certain mining jurisdictions can be much higher risk than others.
Though, it is worth noting that even after today's heavy decline, this gold stock is up over 80% sicne this time last year.
