ROG_chart.pngRoxgold Inc (CVE:ROG) (PINK:ROGFD) started the week with a news release, disclosing gold discovery on their properties and sending the share price flying 70% halfway into Monday’s trading session.

Roxgold announced to have encountered 24.62 g/t gold mineralization in the Yamaroko Gold Concession, in West Africa. The high grades were encountered over 6 meters. Another 62 meters drilled returned 0.62 g/t grades.

Assays are still pending on 19 drill holes on the concession. Assays on 14 of 33 holes have been done so far. The holes were drilled over December 2010 and January 2011.

The Yaramoko permit is contiguous of Semafo’s Mana gold production facility, which is a successful project with pending expansion. Operators plan to have 170 to 190 thousand ounces production in 2011.

roxgold_logo.jpgTraders continue to push the stock price up for the day. Trading volumes remain very high and are pointing towards the possibility of multiday rally.

Fundamentally, Roxgold wasn’t very good until the news came out. The company had little working capital and kept their operational costs to the minimum as well. The corporation was worth $2.2 million in mid-2010.

The discovery of high grade mineralization and a confirmation of bulk tonnage type target fully justify the current market cap of $4.8 million as it’s barely twice the value of the underlying net value of ROG. That is the standard P/B for exploration stage businesses with no production.