Encounter Resources' (ASX:ENR) latest drilling results at the Elsa prospect within the Lamil project in Western Australia indicate mineralization may strengthen at depth, highlighting the potential for a larger sulphide-rich copper-gold system and supporting further drilling, Euroz Hartleys said in a Monday note.
The latest copper results at Elsa include 18 meters at 0.45% copper from 96 meters, and gold results include six meters at 1.74 grams per tonne grade of gold from 94 meters.
"While grades are somewhat modest, they remain highly encouraging, providing an exploration focus for follow-up activities," the equity research firm said.
It added that Encounter Resources also reported geological similarities to the breccia-hosted Havieron deposit, suggesting the potential for a sizeable mineralized system.
Euroz Hartleys maintained a speculative buy rating on Encounter Resources with a price target of AU$0.85 per share.
The company's shares advanced 11% in recent Monday trade.