Why is the Dreadnought share price struggling despite successful drill program

The Dreadnought Resources Ltd (ASX: DRE) share price is stalled today amid a drop in the price of base metals.

Dreadnought shares are currently trading at yesterday’s closing price of 11.5 cents apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 1.09% at the time of writing.

Let’s take a look at what’s going on with the ASX mineral explorer share today.

What’s going on?

Western Australian company Dreadnought is exploring multiple metals including zinc, iron, lead, silver, and gold.

A dramatic fall in the zinc price overnight may have impacted the Dreadnought share price. Zinc slumped 5.07% overnight to US$2,678.5 a tonne.

Base metal prices fell amid rising COVID-19 cases and weak manufacturing data from China, Reuters reported.

The iron ore price also dropped 2.38% overnight to US$82 a tonne, Trading Economics data shows.

Today, Dreadnought advised of successful assay results for drilling at the Central Yilgarn Project in Western Australia.

The company confirmed a fertile VMS base metals system at the Nelson copper, lead, zinc, and silver target. Results included:

• 1m at 2.26% zinc, 2.27% lead, 53g/t silver and 0.1 g/t gold from 157m at drill hole NERC006

At Spitfire, Dreadnought discovered thick high-grade goethite-hematite iron ore. Results included:

• 20m at 61.0% iron, 0.98% aluminum oxide., 2.99% silicon dioxide, 0.06% phosphorus, 8.2% LOI from 22m at drill hole SPRC001A

Management comment

Commenting on the news, managing director Dean Tuck said:

These results are a timely reminder of the potential at Central Yilgarn which represents a significant opportunity in an underexplored region.

We view Central Yilgarn as a valuable project in the portfolio with opportunity for commercialisation of a range of commodities and exploration success.

Share price snapshot

Despite today’s stagnation, the Dreadnought share price has soared almost 200% in the past year, while it has gained 170% year to date.

In the past month, Dreadnought shares have climbed 13%.

Dreadnought has a market capitalisation of about $334 million based on the current share price.

The post Why is the Dreadnought share price struggling despite successful drill program appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. 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 Scott Phillips.

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