Junior explorer Red Metal's shares have surged 45 per cent in two weeks on the hope that it is one of the few Australian minnows to find a giant ore body in Australia.

When Under the Radar says giant, we mean it. And expectations for this minnow are building fast. At 28 cents, its market cap is only $41 million.

But its Maronan silver-lead-zinc project near Mount Isa in northern Queensland is being touted as the next BHP Billiton-owned silver and lead mine, Cannington, which it happens to be next to (OK, about 80 kilometres away). In “near-ology” terms, it doesn't get better than this.

Well it might, and this would be Red Metal's other prospect. It has a huge but very deep copper target near Olympic Dam in South Australia.

Cannington is one of BHP's most profitable mines. The resources giant spent about $450 million developing it in the 1990s and it now returns three times that every year. It's estimated to contain more than $25 billion in minerals.

Under the Radar understands that some brokers are whipping their clients into a frenzy, telling them Santa will carry with him promising drill results at Maronan, sooner rather than later. Presumably many could use some Christmas cheer.

This week Red Metal said it had begun deep drill testing on the Maronan project following up on another hole, which had “significant widths of high-grade lead and silver mineralisation hosted within 50 metre-thick intervals of banded iron sulphide formation rocks”.

Hyping investors into a frenzy is Red Metal itself. The company trumpets that Maronan has the same geological characteristics as its big brother, calling it a “Cannington look alike”.

Radar's geological guru, Trent Allen of Bell Potter, summarises the anticipation investors may feel, keen as they are for Red Metal's Santa to deliver the goods: "The company should know shortly if it is really onto something . . . the good thing about giant ore bodies is you don't need much drilling to know if you've got one”.

Of Maronan itself, he says: “I like the exploration strategy, of looking for blind deposits in Proterozoic rocks, though it's very speculative. Few companies, let alone juniors, have ever discovered a giant ore body in Australia. If there are any left to find they'll be hidden under cover, like Olympic Dam and Cannington were.”

There are three gentlemen (not to confuse them with wise men) on Red Metal's board (there are no women, or anyone else, for that matter), and all have an extensive history in the game.

The chairman, Russell Barwick, is a former chief executive of Newcrest Mining and chief operating officer of Goldcorp.

The managing director, Rob Rutherford, comes from Phelps Dodge, which owns just over 12 per cent, and the non-executive director Joshua Pitt has been raising money to crush rocks all his adult life.

If Santa does deliver, these three will be able to buy the North Pole.

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