Why is the Falcon Metals (ASX:FAL) share price flying 30% higher into the new year?

A falcon flies high over a city skyline.

The Falcon Metals Ltd (ASX: FAL) share price has started the year in style, surging to its highest point yet.

Shares in the gold explorer were swapping hands at 75 cents apiece at market close, up 30%. In afternoon trade, shares hit a high of 78 cents.

The company is going for gold in the Bendigo region of Victoria and also exploring in Western Australia.

Golden start to 2022

The Falcon Metals share price blasted ahead today despite no news from the company.

The gold price was up slightly by 0.24% at the time of writing to US$1,804.40 an ounce. The S&P/ASX 200 Index (ASX: XJO) gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) climbed 0.49% and 0.11% respectively today.

Falcon Metals listed on the ASX on December 22 last year. Investors could be still weighing up how to price the company following its initial public offering (IPO) of 50 cents per share. This offering was oversubscribed and raised $30 million.

Also impacting investor sentiment may be pending exploration activities at the company’s Pyramid Hill gold project in Victoria this month. The company has an “aggressive” drilling program planned this year at the mine.

The company demerged from Chalice Mining Ltd (ASX: CHN) in December. Chalice spun off Falcon to focus on other projects.

Falcon Metals holds the largest exploration licence of any company in the lucrative Bendigo gold region of Victoria. The company also has two other early-stage gold projects in Western Australia. These are known as the Viking project and Mt Jackson Project.

Falcon Metals share price snapshot

The Falcon Metals share price is up 50% since the company joined the ASX and up 100% in the past week.

For perspective, the S&P/ASX 200 Resources Index (ASX: XJR) finished up 2.48% today and has risen 3.43% in the past week.

The company has a market capitalisation of about $135 million based on the current share price.

The post Why is the Falcon Metals (ASX:FAL) share price flying 30% higher into the new year? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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