How to read an ASX drilling announcement: a 10-step checklist

To read an ASX drilling announcement, convert the headline intercept to gram-metres (or %-metres for copper), then check its depth, true width and whether one rich sample carries it, before looking at what the other holes returned, whether the JORC disclosures are complete and how much cash the company has. The ten steps below take about fifteen minutes and link to a detailed guide for each.

Step 1: what kind of announcement is it?

Is it laboratory assays, visual estimates, portable XRF readings, a resource update or a mix? Assays are measured grades; visuals are observations that are not grades at all (see visual estimates in drilling announcements). Then work out where the holes sit: a discovery in a new area, a step-out extending known mineralisation, or infill inside an existing resource. The same numbers mean different things in each, as covered in what is a good drill intercept.

Step 2: convert the headline to gram-metres

For copper, multiply width by percent to get %-metres. Do this for every hole, not just the headline. A rough gold rule of thumb popularised by Stockhead: over 50 gram-metres is good, 100-200 really good, 200-500 excellent and above 500 stellar. Details and limits are in gram-metres explained, and the gram-metre calculator does the arithmetic.

Step 3: check the depth

Read the "from" depth. Shallow, broad mineralisation suits open-pit mining, where gold grades of roughly 1g/t or more get attention. Deeper mineralisation needs underground mining, which typically needs roughly 4-5g/t or more. A copper porphyry can work at 0.3-0.6% Cu because of its scale. Ask whether the grade fits the mining method the depth implies.

Step 4: is the width down-hole or true?

If the announcement does not say, assume down-hole. Check the hole's dip and azimuth against the dip of the mineralised zone. At a 30 degree intersection, the true width is half the down-hole width, and so are the gram-metres. See true width vs down-hole width.

Step 5: look inside the interval

Find any "including" figure and back it out:

Check the cut-off grade, internal dilution rules and whether grades are cut or uncut. If one metre supplies most of the gram-metres, the headline is being carried by that sample. In nuggety gold, look for repeat assays. See smearing and the nugget effect.

Step 6: strip out metal equivalents

If the headline uses AuEq or CuEq, find the individual grades, prices and recoveries. ASX's published guidance treats a missing recovery figure as an implied 100% recovery, which no real plant achieves. Recalculate with realistic recoveries using the metal equivalent calculator and read metal equivalents explained.

Step 7: count the holes

How many holes were drilled in the program, how many are reported, how many returned no significant intercept, and how many are pending? JORC requires balanced reporting, with results placed in perspective. A table where every hole is a hit, from a program that drilled three times as many holes, deserves a question. See cherry-picking and balanced reporting.

Step 8: check the JORC disclosures

Turn to the back. Is there a drill-hole table with collar coordinates, RL, dip, azimuth and depth for each hole? Is JORC Table 1 (Sections 1 and 2) attached, with the drilling method, assay method, QA/QC, aggregation rules and true width statement? Is there a Competent Person statement? Does the company own 100% of the project? See JORC Table 1 explained.

Step 9: put it in context

Compare the hole with the company's previous results on the same prospect, with any existing Mineral Resource, and with peers in the same deposit style. Does it extend the deposit, upgrade confidence, or simply confirm what was known? If there is a resource, know its category split and grade; see Mineral Resources vs Ore Reserves. The drill results leaderboard shows how the hit ranks against recent ASX results.

Step 10: check the money and the market

Look up the latest Appendix 5B. Item 8.7 shows quarters of funding; below 2, the company must explain how it will fund itself, and a capital raising often follows good results. See Appendix 5B explained, cash runway and capital raisings and, for broader context, how to read a quarterly activities report.

Then look at the market. Did the stock run up before the release? How did it move against the XGD on day 1 and day 5? Is the gold or copper price helping or hurting the whole sector? See how share prices react to drill results, what moves gold stocks and what moves copper stocks.

Putting it together: a worked read

A hypothetical gold explorer announces: "Bonanza hit: 18m at 9.1g/t gold".

The read: a genuinely encouraging step-out with a high-grade core, but the headline grade leans on 2m, the true width is uncertain, half the program is still unreported and the company will very likely need to raise money soon, after a share price run-up. None of that means the result is bad. It means the headline alone overstates what is known. DrillScore applies this kind of reading to each analysed release; see the methodology.

This checklist is general information to help you read announcements. It is not financial advice and not a recommendation about any security; consider your own circumstances or speak to a licensed adviser before making decisions.

The short version

• Convert every intercept to gram-metres or %-metres, then adjust for depth and true width.
• Back out "including" intervals and strip out metal equivalents to see the underlying rock.
• Count holes drilled against holes reported, and check the JORC Table 1 and drill-hole table.
• Compare with previous holes, any resource and peers in the same deposit style.
• Check cash runway and the price reaction against the XGD before drawing conclusions.