(Rating: 3.58 / 5 - total 12 votes)
Loading...It was a tough day for Riverstone Resources on the market, as its shareprice suffered after announcing a resource update/upgrade.
Though Riverstone Resources added ounces to its Karma gold project in an updated resource, investors pummelled its stock, which as of presstime had fallen 10 percent to C$0.65 on strong trading volumes.
Riverstone Resources said the increase amounted to a 42 percent increase in global resources to 54.1 million tonnes @ 1.02 g/t gold in indicated resources and 37.4 million tonnes at 0.8 g/t Au in inferred resources.
Jeffrey Wright, an analyst with Global Hunter Securities who covers Riverstone Resources, was upbeat about the resource update that added gold ounces and upgraded inferred resources within a number of the Karma project’s deposits in Burkina Faso.
“We take note of the increase at the Goulagou II deposit now containing over 680,000 ounces of gold in the indicated category with a grade of 1.35 g/tonne,” Wright noted in a statement emailed to Mineweb. “Also of importance is the Kao deposit hosting over 800,000 ounces of gold in the indicated and inferred categories with an average grade right below 1 g/tonne.”
He added, “In my opinion the announcement shows good progression at the project.”
As for what was driving the drop in Riverstone Resources’ shareprice, Wright related it to possible disappointment in the size of the updated resource. “I think the modest sell off in Riverstone today is result of some party having an expectation of either a larger overall number or higher grade intercepts.”
But Wright argued: “we believe the increase in the resource demonstrates steady progress at the Karma project.” Wright said that Global Hunter Securities does not hold a position in Riverstone Resources.
Riverstone Resources President Dwayne Melrose could not be reached for comment on Monday.
