‘Garimpeiro’ columnist Barry FitzGerald has covered the resources industry for 35 years. He now shares the benefits of his experience with Stock head readers.

Garimpeiro recently explained that small gold explorers need to be reassessed in response to the exceptional performance of the gold price in 2024.

Aside from the week’s slight stumble in response to Donald Trump’s election victory (that’s still a magic amount of around $4,050 an ounce in Australian dollars), things have never been better for producers, developers and explorers.

This has, however, been reflected in the share price performance of producers and developers in the year to date. But explorers are having trouble attracting investors.

Fair enough too. In the absence of a major discovery, the average explorer has little more to offer than the lure of blue skies and the likelihood of having to return to the market capitalization on hand to replenish their coffers in the not too distant future .

But if an explorer can begin to build an investment case by initially establishing a stock market-compliant “exploration target” for its flagship project, it can expect to begin to attract investor interest.

If the exploration target has a certain scope, so much the better.

Like Errol Flynn

It is for these reasons that Garimpeiro’s attention was drawn this week to Flynn Gold (ASX:FG1). It only joined the ASX in 2021 as an explorer focused on northeast Tasmania.

Its name refers to Errol Flynn, the Tassie-born film star of the 1930s and 1940s, who first stopped off at Morobe in PNG for a gold-hunting trip before moving on to Hollywood.

The company’s biggest backer since day one, Melbourne businessman Colin Bourke, believes there could also be a family connection to Flynn, since Flynn is the maiden name of his wife from Launceston family roots.

Maybe. What is more certain is that the company’s stock performance has been anything but bluster since its listing.

Earlier in the week its shares were trading at a princely 3.2c for a market capitalization of $8.3 million or an enterprise value of $6.5 million after taking into account cash of 1 .8 million dollars.

It must be credited that the company has performed well in north-east Tassie, as part of its flagship Golden Ridge project. So much so that it now has something to hold on to: the creation of a first exploration target announced on Friday.

This is a good size product, ranging from 450,000 to 520,000 ounces depending on low or high volume and quality expectations. Flynn’s shares soared to 3.4c in response, a welcome gain to be sure, but still leaving Flynn in the under $10 million category.

Time to make some comparisons

Plonk a project with a similarly sized exploration target (size and grade are conceptual, and additional drilling is required to progress towards a compliant mineral resource estimate) in Western Australia, and it is likely that the market capitalization of Flynn would be a multiple of where she is. Today.

This reflects the fact that Flynn finds himself alone in north-east Tassie, even though he operates in a historically gold-producing region.

It does, however, give it pioneer status in pursuing the modern geological theory that north-east Tassie hosts an extension of the same rocks found in Victoria that recently gave rise to the very high-grade Swan Lode discovery at Fosterville , as well as success. at Sunday Creek, near Melbourne, enjoyed by Southern Cross Gold (ASX:SXG).

The Swan Lode is losing steam, but Fosterville, now owned by Canadian company Agnico Eagle, remains Victoria’s largest gold mine and one of the most profitable in the world per ounce of gold produced thanks to its still impressive grade of 8.6 g/t.

Fosterville is only a small part of Agnico Eagle, worth C$58 billion, while Sunday Creek is largely the flagship of Southern Cross, which now has a market capitalization of $620 million.

Sunday Creek comes with an exploration target of 1-1.6 Moz gold equivalent (it comes with antimony) which was announced in January.

But there should be a lot more in the tank. The same is true for Flynn’s Golden Ridge, where the exploration target sits on less than 30% of the prospective terrain.

Flynn managing director Neil Marston said the declaration of the exploration target was “a significant step forward towards our next objective of defining a first JORC mineral resource for the project”.

“There is potential to significantly increase tonnage and grade at Golden Ridge through infill and expansion drilling, which will be a major priority for the Company in 2025,” he said.

The views, information or opinions expressed in this article are solely those of the columnist and do not represent the opinions of Stockhead. Stockhead does not provide, endorse or otherwise take responsibility for any financial product advice contained in this article.

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