NSW-focused explorer Australian Gold and Copper listed on the ASX in early 2021 following a A$10 million initial public offering.

AGC is controlled by 55% shareholder, Hong Kong’s Delin Mining Group Cooperation, following a A$10.1 million investment last year.

Aside from its very first day on the market, the stock had never traded above its A20c IPO price – until this month when AGC announced high-grade precious and base metals results from its Achilles target.

The stock went from A9c to as high as A61c – surpassing the A$100 million market capitalisation mark in the process.

It’s fair to say that makes AGC one of the best performing juniors of this month – if not the year.

Achilles

The Achilles target is part of the South Cobar project and sits 20km northwest of Lake Cargelligo.

AGC has been working on the target since listing and on April 23, announced results of up to 8.1 grams per tonne gold and 735g/t silver. The market was unmoved.

On May 15, AGC announced reverse circulation results from drilling to the east and down-dip of the April holes.

The company reported a standout hit of 5m at 16.9g/t gold, 1473g/t silver and 15% lead and zinc with peak grades of 45g/t gold, more than 3000g/t silver (the limit of the laboratory’s testing ability) and 38.8% lead and zinc.

Mineralisation has been encountered over 550m of strike.

The stock more than doubled to A24.5c and kept running, peaking at A61c last week.

AGC emerged from a trading halt yesterday to raise A$11 million at A32c per share – a 22.9% discount to the previous close – to boost its cash balance to more than A$21 million.

The rally in the stock resumed yesterday, with AGC closing 22.4% higher at A47.7c after trading as high as A53c.

Assays for another six holes from Achilles are due in the coming weeks, while the funds raised will be used to accelerate exploration.

Is the hype justified?

Long-suffering punters in the junior mining space could be forgiven for getting overexcited by some high grades, but those in the know suggest there’s some merit to the surge in AGC’s share price.

Among those watching closely is veteran mining analyst, Far East Capital’s Warwick Grigor.

“Although it is always a point of conjecture as to when a discovery is actually a discovery, I feel fairly safe in declaring Australian Gold and Copper’s Achilles project a discovery,” he wrote in an email to his subscribers last weekend.

He said AGC would provide good trading opportunities as further results rolled in.

“Now is the time when speculation will be at its highest level,” Grigor said.

“To some extent the discovery has already been factored into the share price, but who knows just how big this is going to become.

“This is an example of how dramatically fortunes can change with a few good drill holes.”

While not formally covered by Argonaut, the investment house is keeping an eye on AGC.

Analyst George Ross said the results reported to date could indicate a new discovery with datasets indicating that mineralisation could continue within the immediate vicinity and along trend.

“The Achilles prospect could become a discovery of regional economic significance, and we will continue to monitor new drill results in earnest,” Ross said last Thursday.

However, he warned that AGC had “flown close to the sun”, so investors should be wary of a share price pull-back in the short term.

Ross was spot on, with AGC shares going from A56c that day to as low as A39c on Wednesday.

But if yesterday’s rally is anything to go by, the pull-back may be over.

Nearology

The Cobar region is well-known for gold and base metals with established mines including Metals Acquisition’s CSA, Aurelia Metals’ Peak and Aeris Resources’ Tritton.

The closest deposit to Achilles is Peel Mining’s South Cobar to the north, which has resources of 197,000t of copper, 296,000t of zinc, 128,000t of lead and 21.2 million ounces of silver.

While Peel shares enjoyed a spike off the back of the AGC news, despite its large resource, its market cap is still smaller than AGC’s at around A$75 million.

Minnows Eastern Metals (EMS) and Strategic Energy Resources (SER), each with market caps of below A$10 million, hold the adjoining ground to the north and east of Achilles, while Talisman Mining (TLM) has ground to the west.

EMS shares surged from A2.8c to as high as A5c off the back of the AGC news, allowing the company to raise A$1 million at A3.2c to accelerate work currently underway at Cobar.

Shares in SER went from A0.8c before the AGC announcement to as high as A3.4c and it raised A$2 million at A1.1c for drilling at its own Achilles 1 prospect.

TLM, which has a larger market cap of A$66 million, has also enjoyed a share price rise off the back of the Achilles discovery, though its current focus is its own discoveries at Rip n Tear and Durnings to the east across the lake.