News

May 28, 2023

Gold 50 hits gallium jackpot near punting mecca

Ever since Las Vegas allowed the first roll of the dice, “Sin City” has attracted gentleman, reprobates and dreamers all looking to land the big one and strike it rich. For many, however, the famed

Ever since Las Vegas allowed the first roll of the dice, “Sin City” has attracted gentleman, reprobates and dreamers all looking to land the big one and strike it rich.

For many, however, the famed Las Vegas strip quickly turned into a boulevard of broken dreams, leaving little else to fill the pockets with other than losing tickets and regret. If only the vanquished knew that the real prize might have been sitting just an hour’s drive away.

North Sydney-based Gold 50 turned its dreams into reality last week and came up aces after hitting gallium in a maiden drilling program at its Golconda project in Arizona, just across the Nevada border from the punting mecca.

The news immediately tickled the fancy of ASX punters as the company’s stock climbed 146 per cent to a peak of 48 cents after closing last week at just 19.5c.

The $12 million market-capped explorer says its campaign hit the precious metal in 11 of the 14 holes of its latest campaign, including a 109m intersection going 40.5 grams per tonne from 129m. Other headline results include 241m grading 20g/t gallium from surface, a whopping 308m running 28.6g/t from surface and 271m at 23.8g/t, again from surface and containing 70m going 34.2g/t gallium from 93m.

So what is gallium and why did it excite market more than a Las Vegas showgirl?

Gallium is used in alloys which are in turn in optics, electronics and nuclear engineering due to its non-toxicity and resistance to neutron radiation and beta decay.

However, it really finds its value in its use in alloys with other metals such as aluminium, copper and tin to create gallium arsenide – a compound used in semiconductor fabrication. The metal provides a critical component in multiple steps of the manufacturing process for computer chips and other electronic devices.

And given the global computer chip shortage that has been strangling supply chains around the world since the COVID-19 pandemic hit, that is having a massive impact on pretty much everything with a computer chip, which in modern society is basically anything you don’t eat.

With the world’s dependence on technology growing by the day, the demand for gallium is only forecast to go one way given its critical role in new technologies. For example, 5G mobile technology uses gallium arsenide-based chips as they are energy-efficient and produce minimal heat, meaning 5G towers use less power or air conditioning as those using silicon chipsets.

However, like most things that are critical to our lives, it is also becoming the subject of political sabre-rattling and that could also be a boost to the merry explorers at Gold 50.

A phrase so often uttered is, “with China having a stranglehold on production”. And what do you know, it is relevant again with the Celestial Kingdom controlling 95 per cent of global gallium production. It is a figure causing increasing concern with US and European-based governments and companies.

Just ponder this, Gallium nitride is used in military radar, lasers and satellites … so it is something the Pentagon might be losing more than just a little sleep over.

Add to the mix that Beijing revealed this month that it will impose export restrictions on gallium and germanium products used in computer chips and other components to protect national security interests from August 1, and gallium might have suddenly became the most valuable metal you had never heard of.

It also means that a decent find within the US borders is likely to be enthusiastically received by those with an eye on global supply chains. Oh, and those in the Pentagon.

Gold 50’s flagship Golconda project sits over the historical Golconda mine that was once the highest-grade zinc producer in the US before ceasing production after a fire in 1917. The company says that while the area had been mined to a depth of 400m with high silver and gold grades, the potential of precious metals has been largely untested and there has been no systematic exploration in more than three decades.

More drilling is planned this year and after last week’s results, it can be confidently predicted that there will be plenty of people keeping an eye on what Gold 50 can uncover in the Arizona wilds.

Elsewhere last week, Artificial Intelligence 3D imaging company Pointerra surged 118 per cent after winning a deal to provide US power company Entergy with digital models of its grid. The company’s world-first Quick Load electric grid assessment tools rapidly assess and prioritise the works to be completed in the most cost-effective and efficient manner possible.

Its shares touched 21c after closing the previous week at just 9.6c.

Online marketplace Redbubble soared 66 per cent to hit 64c, up from 38.5, on the back of two favourable rulings by the US Court of Appeals regarding an alleged third-party IP infringement.

And finally, x-ray technology company Micro-X jumped 52 per cent to hit 16c after securing an extension to its contract with the US Department of Homeland Security.

The company’s passenger self-screening project relates to the department’s vision of replacing the current conveyor belt design for the screening of carry-on luggage with a bank of multiple “self-service” security stations capable of scanning passengers and their carry-on luggage at the same time.

The concept is based on the idea of self-service checkouts at supermarkets, moving from a staffed conveyor system to a smaller and automated self-service system to increase throughput, improve staff efficiency and improve passenger experience.

Notably, all three of those stocks rely on gallium and might well mean there will be a bigger crowd cheering on Gold 50 as it prepares to fire up the drill rig – perhaps after some well-deserved R&R up the road.

Is your ASX-listed company doing something interesting? Contact: [email protected]

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