Richer grades of gold concentrate from a mine in Chile help to fuel the rally in small cap Xtract Resources (XTR:AIM), up 20% to 0.3p.
After setbacks last year, it's fair to say that 2015 has been fantastic for the £15 million cap with the share price up 335% since early February as investors clamber for a slice of the gold and copper business.
Chief executive officer Jan Nelson has good pedigree among investors. He made a great job at building up South African gold producer Pan African Resources (PAF:AIM) before leaving that business in 2013.
Many people clearly believe he can repeat this success with Xtract where he's been testing a variety of projects over the past few years to establish the exact direction for the miner.
Nelson's kicked the tyres on a uranium deposit project in South Africa but walked away a year ago after saying it didn't meet the company's investment criteria.
A phosphate deposit in Chile was also briefly explored and sold for peanuts last October, leaving Xtract to focus its attention on the Chepica gold and copper mine (which is the focus of today's announcement) and evaluation of copper dumps in South Africa.
Xtract says it has now started surface mining at the Salvadori II prospect that's part of Chepica. That's unearthed relatively high gold grades.
Its processing plant is now handling material whose mineralogy has resulted in higher metal recovery rates.
The result is an increase in gold concentrate grades from 40 grams per tonne to over 400 grams per tonne.
The share price is now back up to the point at which we said the business was over-valued (18 Jul 2013). Our negative stance proved correct as the shares subsequently fell to circa 0.07p by early 2015.
At that time of our original article, Xtract was worth £6.6 million with a mere £600,000 cash in the bank, a few shares in a shale oil company and the rights to look at a few projects, none of which are still in its portfolio.
Fast forward to the present day and it now has a revenue-generating asset. The market clearly likes the company's prospects and we'd have to agree that it is certainly worth another look, although valuation still remains a moot point.
