Waiting on Rumble's Zinc News

Waiting on Rumble's Zinc News

Last week the Dow Jones Index pierced 34,000 for the first time, the gold price continued to rise with new found enthusiasm that justified the encouraging performance of many of the gold producers that are breaking out of downtrend, and the iron ore price surged to a nine and a half year high. All three events worked to propel our local stock market indices higher. BHP and RIO burst out of recent downtrends.

Everything looks rosier now with an increasing number of charts breaching downtrends, causing the Sentiment Oscillator to continue with the reversal into positive territory In the absence of a seriously negative disruption from left field, all signals suggest an improving resources market. So far most of the improvement has been in the more traditional mining stocks with battery and rare earths companies taking a bit longer to attract attention.

Rumble Resources (RTR) has been one of our favourite WA exploration stocks in recent months, but admittedly it has been a modest performer in the market … up until last week. The share price has run hard ahead of going into a trading halt relating to exploration results from drilling at the Earaheedy Zn-Pb-Ag project, 110 km north of Wiluna. While not the sexiest of metals, the exploration target is substantial, being 40-100 Mt at 3.5% Zn-Pb to 4.5% Zn-Pb of open pitiable resources. At that size it would be a Tier 1 asset, with 4% zinc grades equating to 1.8 gpt gold. At 100 Mt that could have similar in-situ value to 6 Moz. It could be a “company maker”.

Rumble is part way through a 4,000m, 40 hole drill program at Earaheedy. As we write, ahead of coming out of the trading halt, the ASX release from 8 April said that four holes with good looking geology had been fast tracked to the assay lab. That is what started the run in the share price.