Shares in WA's newest gold producer Doray Minerals soared to 14-month highs yesterday after the Meekatharra miner announced drilling results that could extend the life of its mine.
Doray, which began production at its Andy Well project in August, announced a new gold zone about 400m south-east of its Wilbur Lode, the current producing mine.
The company said it hit 0.5m at 59 grams per tonne of gold, 451m down hole, which included a wider interval of 3.6m at 8.8g/t.
The short 3½-year mine life at Andy Well has lingered as a concern for many market watchers, and yesterday's find appeared to give investors more confidence it could be extended.
Doray's shares jumped 7ï¿½ to 82.5ï¿½ on the news, valuing the company at $117 million and pushing its shares to their highest level since November 2012.
Further results from the program were due in coming weeks, the company said.
Doray released its December- quarter report last week, saying it had produced 24,162oz during the period with all-in costs of $949/oz and an average sale price of $1472/oz. It had $23.7 million in the bank as of December 31, with $42 million in debt, after receiving $16 million during the quarter from its mining operations.
Officially opening the Andy Well mine in November, managing director Allan Kelly indicated the company would build up its cash pile and look for an acquisition.
However, yesterday's find - along with other targets scattered around the site - could give the company greater confidence to pour the money back into its existing mine.