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Module 4: Reading Drill Result Announcements

Why this matters

Drill result announcements are where companies most actively shape perception. The headlines are often technically accurate but designed to obscure what an experienced reader would immediately spot.

Learning to read drill results properly is the single highest-leverage skill in junior mining investing. Get this right and you avoid 80% of the traps.

The standard format

A drill result announcement typically headlines an intercept like this:

"PRG02 returned 24m @ 3.5 g/t Au from 85m, including 6m @ 11.2 g/t Au from 92m"

You need to decode every part of that:

  • PRG02 — hole identifier
  • 24m — down-hole length of the intercept
  • 3.5 g/t Au — length-weighted average grade across that 24m
  • from 85m — depth at which the intercept starts
  • including — a sub-interval within the parent intercept (almost always the high-grade core)
  • 6m @ 11.2 g/t Au from 92m — that high-grade core

What's not in the headline:

  • True width
  • Hole orientation and dip
  • Rock type / mineralisation style
  • Whether top-cut was applied
  • Recovery / RQD (rock quality)
  • Assay method

These are usually in the JORC Table 1 appendix, which retail rarely reads. Read it.

Length-weighted vs grade-weighted

Headline grade is length-weighted:

weighted grade = Σ(interval_i × grade_i) / Σ(interval_i)

Example: 24m intercept made of:

  • 18m @ 1.0 g/t (low-grade halo)
  • 6m @ 11.0 g/t (high-grade core)

Length-weighted = (18×1.0 + 6×11.0) / 24 = (18 + 66) / 24 = 3.5 g/t

Looks like a uniform 24m of 3.5 g/t mineralisation. Reality: 6m of bonanza surrounded by marginal halo. Whether you can mine that depends entirely on geometry, mining method, and selectivity.

Always read the "including" sub-intervals to see what's really there.

Down-hole length vs true width

Drilling is often angled to intersect mineralisation perpendicular (or as close as possible). The reported intercept is down-hole length — the actual length of drilled core.

True width is the actual thickness of the mineralised body measured perpendicular to its strike and dip.

If the hole is drilled at an angle to the mineralisation:

  • Hole drilled exactly perpendicular: true width = down-hole length
  • Hole drilled at 45° to mineralisation: true width ≈ down-hole length × 0.7
  • Hole drilled subparallel (worst case): down-hole length wildly exaggerates true width

Companies are required to disclose true width or state it cannot be determined. When you see "true width estimated at ~70% of reported length", apply that mentally to all intercepts.

When the announcement says nothing about true width, check the long-section diagram (if provided) and figure it out yourself.

Gram-metres (g·m) — the universal currency

Professional analysts rank holes by gram-metres (or %·m for base metals):

g·m = grade × down-hole length

So 24m @ 3.5 g/t = 84 g·m

This single number lets you compare holes across different deposits, different widths, different grades.

Rough benchmarks for gold drill holes:

  • <20 g·m = barely interesting
  • 20–50 g·m = solid intercept
  • 50–100 g·m = strong hole
  • 100–500 g·m = exceptional
  • 500+ g·m = world-class / company-making

For copper porphyry: %·m equivalent (e.g., 200m @ 0.6% Cu = 120 %·m).

Use g·m to cut through the marketing. A "100m @ 0.5 g/t" intercept (50 g·m) is being sold as more impressive than "5m @ 12 g/t" (60 g·m), but the latter is actually a better hit — and far easier to mine.

Common cherry-picking and obfuscation patterns

1. "Up to" reporting in headlines

"Up to 45 g/t Au returned from drilling"

That's a single peak assay over a 1m sample interval. The actual intercept might be 1m @ 45 g/t with 19m of barren rock either side. Always look for the weighted intercept, not the peak assay.

2. Loose "includes" wrapping

A 50m parent intercept at 0.4 g/t with a 1m core at 12 g/t lets the company headline either:

  • "50m @ 0.7 g/t including 1m @ 12 g/t" (sounds bulk-mineable)
  • Or just "1m @ 12 g/t" (sounds high-grade)

Same hole, two stories. Both true. Neither tells you if the deposit has scale and grade together.

3. Composite reporting hiding internal waste

A reported "20m @ 2.0 g/t" intercept might actually be:

  • 5m @ 6 g/t
  • 10m @ 0.1 g/t (essentially waste)
  • 5m @ 4 g/t

Composited, it averages 2.0 g/t and looks like a single zone. In reality, two separate thin lodes with waste between them. Mining selectively to avoid the waste is much more expensive.

Look at the assay table in the appendix. The granular metre-by-metre assays tell the truth.

4. No top-cut applied

A rogue 200 g/t assay in a single sample can lift a 30m intercept from 1.5 g/t to 8 g/t on paper. Best-practice resource estimation applies a top-cut (e.g., cap all assays at 30 g/t). Drill result announcements don't usually apply top-cuts because doing so kills the headline. Mentally cap any single-metre assay above ~5x the bulk grade.

5. Hole orientation games

A hole drilled subparallel to a vein system will produce huge down-hole intercepts that have small true widths. "100m @ 5 g/t" sounds amazing but if true width is 8m, it's a far less impressive hole.

6. Selective announcement timing

The good holes get headlined immediately. The poor holes from the same program get bundled into a quarterly months later, or never reported individually. Cross-reference the program's planned holes (in earlier announcements) against the holes that were actually reported on. If they drilled 30 holes and you've only seen results from 12, the other 18 weren't great.

7. Step-out vs infill

  • Infill drilling confirms continuity within a known zone. High strike rate expected.
  • Step-out drilling tests outside the known zone. Lower strike rate but more value if successful.

A "12 of 12 holes hit mineralisation" announcement looks great until you realise they're all infill within a previously-known zone. No new value added; just resource definition.

What a good drill announcement looks like

Green flags when reading:

  • True width is disclosed for each intercept
  • Long sections and plan view diagrams included
  • Multiple holes, in step-out configuration, all showing economic intercepts
  • Grade continuity along strike and at depth, not just one bonanza pod
  • Geological description matches a known deposit model
  • JORC Table 1 is detailed and consistent with prior announcements
  • Assay table provided as an appendix
  • Independent CP signs off

When you see all of that, you're looking at a serious result. When you see "up to" headlines, no diagrams, and one big intercept with everything else "pending", treat the announcement as marketing.

A practical reading checklist

For every drill result announcement, answer:

  1. What's the headline intercept in g·m?
  2. What's the true width vs down-hole length?
  3. Is the headline a single hole or multiple holes?
  4. Where does the hole sit — infill or step-out?
  5. What's the high-grade core stripped out, vs the parent interval?
  6. Are there any single-metre assays driving the average?
  7. How many holes from the program are still pending? Why?
  8. Does the geology match the deposit model the company is selling?

You will be ahead of 95% of retail if you do this for every announcement on every stock you hold.

Pre-event positioning patterns

The drill result trade is well-known and well-played:

  • Pre-drilling ramp: SP runs as the market positions for assays, often 20–100% above pre-news levels.
  • Assay window: depending on lab queues and program size, results can take weeks. SP often peaks 1–5 days before the actual announcement as insiders/anticipators take profit.
  • Sell the news: even good results often see a SP fade because the "best case" was already priced in.
  • Surprise upside: genuinely exceptional holes (200+ g·m for gold) trigger fresh leg up because they exceeded the priced-in best case.

Don't confuse "good drill result" with "good trade". The trade depends on what was already priced in.

What I'm uncertain about

  • Lab turnaround times have varied considerably with commodity cycle activity (gold/lithium booms cause queue delays). A "results expected in 4 weeks" guidance can stretch to 8+ weeks during peak cycles.
  • ASX continuous disclosure thresholds for what constitutes price-sensitive vs not have been refined a few times — companies retain meaningful discretion in batching results.
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