The Alicanto Minerals Ltd (ASX: AQI) share price is going ballistic today, up 20% trading at 15.5 cents at time of writing after earlier posting gains of more than 35%.

We take a look at the latest drill results from the ASX resource explorer that look to be stoking investor interest.

What drill results were announced?

The Alicanto share price is soaring after the company reported “spectacular historic drilling results” at its Sala silver-lead-zinc project, located in Sweden. Alicanto noted the presence of exceptionally high grades of silver, zinc and lead.

The results come from drilling conducted in the 1970s by the previous project site owner, Boliden. The Swedish Geological Society only just released the assays publicly for the first time. The assays are derived from a total of 12,225 metres of shallow historical drilling.

Alicanto noted that the shallow mineralisation “highlights the significant potential of the Sala Project”.

Some top historical intercepts include:

• 8m at 5.3% Zn and 40 g/t Ag, including 2.1m at 36.4% Zn
• 8m at 450 g/t Ag, 12.2% Zn, 7.2% Pb
• 7m at 42 g/t Ag, 11.6% Zn, 0.3% Pb

What did management say?

Commenting on the historic assays, Alicanto’s managing director Peter George said:

The grades and widths of the mineralisation are spectacular and many of the intersections sit within the area we are currently targeting for our maiden JORC-compliant Resource. Not only will this data save us 5,000 metres of drilling, time and money, but the strength of the results will also help underpin our resource estimate.

When combined with the 200 million ounces [of] silver produced historically and the exceptional results we have been generating from our own drilling, it is clear that Sala is a world-class mineralised system with immense exploration upside.

The company anticipates its maiden JORC-compliant resource estimate at Sala in the first quarter of 2022.

Alicanto share price snapshot

The Alicanto share price has gained 45% so far in 2021. That handily beats the 11% year-to-date gain posted by the All Ordinaries Index (ASX: XAO).

Over the past month Alicanto Minerals’ shares have gained 33%.

The post Here’s why the Alicanto (ASX:AQI) share price is rocketing 20% today appeared first on The Motley Fool Australia.

More reading

• Here’s why Morgans tips another 10% upside for the IAG (ASX:IAG) share price
• The Bank of Queensland (ASX:BOQ) share price will trade ex-dividend on Thursday. Here’s what you need to know
• The Xero (ASX:XRO) share price is holding up ASX tech shares today
• Why Beach, Mineral Resources, Origin, and Telstra are storming higher
• Why is the AGL (ASX:AGL) share price having such a good start to the week?

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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The Bank of Queensland Limited (ASX: BOQ) share price is climbing during afternoon trade, clawing back some of last week’s losses. This comes despite the regional bank not releasing any price-sensitive announcements to the ASX today.

At the time of writing, Bank of Queensland shares are up 0.88% to $9.18 apiece.

Bank of Queensland shares set to go ex-dividend

While the company has been quiet on the news front, investors are buying up Bank of Queensland shares.

A catalyst for the rising Bank of Queensland share price could be that the S&P/ASX 200 Index (ASX: XJO) is steaming ahead. As such, the benchmark index is up 0.32% to 7,439.6 points.

Another possible reason for the company’s shares pushing higher is the upcoming ex-dividend date.

Investors need to buy Bank of Queensland shares before the ex-dividend date on Thursday to be paid the final dividend.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

What does this mean for shareholders?

For those who are eligible for the Bank of Queensland final dividend, shareholders will receive a payment of 22 cents per share on 18 November. The dividend is also fully franked which means shareholders can expect to receive tax credits from this.

Investors who elect for the dividend reinvestment plan (DRP) will see a discount applied to the volume-weighted average price. This is likely to be for a number of trading days subsequent to, and inclusive of, the ex-dividend date period.

Details of the price the DRP will be offered are yet to be released on the company’s website. It’s expected that the announcement could come in the next few days as the record date is 29 October.

The last election date for shareholders to opt-in to the DRP is 1 November.

Bank of Queensland share price summary

It has been a solid year for Bank of Queensland shares, which are trekking around 22% higher in 2021. Looking at a longer timeframe, its shares are hovering above 40% for the last 12 months.

Bank of Queensland commands a market capitalisation of roughly $5.9 billion, and has approximately 640.9 million shares outstanding.

The post The Bank of Queensland (ASX:BOQ) share price will trade ex-dividend on Thursday. Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• Here are 5 ASX shares trading ex-dividend this week
• Why is the Bank of Queensland (ASX:BOQ) share price underperforming the big four lately?
• Why have investors been selling off Bank of Queensland (ASX:BOQ) shares lately?
• Top brokers name 3 ASX shares to buy today
• Can the BOQ (ASX:BOQ) share price hit $11 by the end of 2021?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has kicked off this Monday’s trading on a positive footing. At the time of writing, the ASX 200 is up a healthy 0.43% to 7,447 points.

The Xero Limited (ASX: XRO) share price is recording higher gains though. Xero is currently being priced at $150.54 each, 0.57% higher for the day so far.

It’s one of the more fortunate companies in the ASX tech sector today, which is mostly experiencing some selling pressure today so far.

Why are ASX 200 tech shares being sold off today?

Well, Xero’s outperformance doesn’t appear to be anything to do with the company specifically. The company has not made any major or price-sensitive announcements to investors thus far this Monday. Or for almost a month, come to think of it.

What we do see though is what seems to be a market-wide rejection of ASX tech shares today.

It could be worse for Xero this Monday. Although Xero is in the green, other ASX tech shares, ranging from Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) to Zip Co Ltd (ASX: Z1P) and Altium Limited (ASX: ALU), are in the red across the board. Indeed, the S&P/ASX All Technology Index (ASX: XTX) is currently down by 0.61%.

So what’s going on here?

Well, this sell-off might have been sparked by what happened on the US markets last week. On Friday night (our time), the US’s tech-heavy NASDAQ-100 (INDEXNASDAQ: NDX) Index lost 0.87%. Tech shares, both here and in the US, have been struggling with rising government bond yields in recent weeks.

Although bond yields don’t have a direct impact on tech shares specifically, they still can have a big impact on how tech companies in particular are valued by investors. That’s because rising yields increase the risks of owning companies that are still in their ‘growth phases’ and not yet bringing in meaningful positive earnings.

That arguably covers many shares in the tech sector, including Afterpay and Xero. After all, the Xero share price is today being valued with an eye-watering price-to-earnings (P/E) ratio of 1,166.

Could Xero shares be a buy today?

So with the Xero share price now ‘only’ up 2.48% over the year to date, many investors might be wondering if this is a buying opportunity for Xero. One broker who thinks it might be is Goldman Sachs.

As my Fool colleague James covered last week, Goldman is currently rating Xero as a ‘buy’ with a 12-month share price target of $165 a share. That implies a future potential upside of more than10% over the next year. Goldman likes how Xero’s growth rates are holding up and feels like the company is now more fairly priced than it was in the past.

At the current Xero share price of $150.22 a share, this company has a market capitalisation of $22.32 billion.

The post The Xero (ASX:XRO) share price is holding up ASX tech shares today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Telstra’s acquisition, Mineral Resources jumps
• 5 things to watch on the ASX 200 on Monday
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Altium, Appen Ltd, and Xero. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decent gain. At the time of writing, the benchmark index is up 0.35% to 7,441.6 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Beach Energy Ltd (ASX: BPT)

The Beach share price is up over 4% to $1.44. This appears to have been driven by rising oil prices and a broker note out of Morgan Stanley. In respect to the latter, this morning the broker retained its equal-weight rating but lifted its price target on Beach’s shares to $1.70. It made the move on the belief that LNG prices will increase materially over the remainder of the 2020s.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price is up 9% to $42.81. This follows news that the company is restarting its 40% owned Wodgina Lithium Mine in the Pilbara region of Western Australia. Wodgina has been on care and maintenance since November 2019. It will be restarted to initially produce 250,000tpa of spodumene concentrate. Production is expected to commence from the third quarter of 2022.

Origin Energy Ltd (ASX: ORG)

The Origin share price is up 3.5% to $5.36. This morning the energy company announced the sale of a 10% stake in Australia Pacific LNG for $2.12 billion to EIG. This leaves Origin with a 27.5% holding in the LNG business. Management notes that this cash injection provides further flexibility to deliver returns to shareholders and pay down debt, while allowing Origin to accelerate investment in growth opportunities.

Telstra Corporation Ltd (ASX: TLS)

The Telstra share price is up over 2.5% to $3.83. Investors have been buying the telco giant’s shares after it announced the acquisition of Digicel Pacific. Telstra has teamed up with the Australian Government to acquire the South Pacific-based telco for US$1.6 billion. The deal includes additional payments of up to US$250 million, subject to Digicel Pacific’s business performance over the next three years. Telstra expects the deal to be earnings per share accretive.

The post Why Beach, Mineral Resources, Origin, and Telstra are storming higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Telstra’s acquisition, Mineral Resources jumps
• Telstra (ASX:TLS) share price higher following Digicel Pacific acquisition news
• Why the Mineral Resources (ASX:MIN) share price is charging higher on Monday
• Origin Energy (ASX:ORG) share price on watch following $2b deal
• Telstra (ASX:TLS) share price on watch after announcing US$1.6bn Digicel acquisition

Motley Fool contributor James Mickleboro 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 owns shares of and has recommended Telstra Corporation Limited. 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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The AGL Energy Limited (ASX: AGL) share price is in the green on Monday despite no news released by the company.  

At the time of writing, the AGL Energy share price is trading at $6.16, 1.32% higher than its previous close.

The energy company’s not alone in its gains. Right now, the S&P/ASX 200 Energy Index (ASX: XEJ) is leading its peers with a 1.9% gain.

Topping the index is the Beach Energy Ltd (ASX: BPT) share price, which is boasting a 3.77% gain on Monday. That of Origin Energy Ltd (ASX: ORG) isn’t far behind. It’s gained 2.99% today.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up 0.43%.

Let’s take a look at what might be boosting ASX-listed energy shares higher on Monday.

AGL share price up alongside energy commodities

According to reporting by The Australian, Citi’s head of Australian banks research, Brendan Sproules believes oil and gas prices will continue to be volatile.

Data from CNBC shows the US natural gas futures has gained 4.8% today and 42% since this time last month. It’s currently sitting at US$5.53 per metric million British thermal units.

Additionally, oil prices have surged recently. The Brent crude futures price has gained 18% over the last 30 days to trade at US$85.93 per barrel. Right now, West Texas Intermediate oil futures is trading at US$84.40 per barrel, 23% higher than it was this time last month.

While AGL doesn’t specifically deal in oil, surging oil prices generally spell good news for the energy sector.

Additionally, as The Motley Fool Australia reported earlier today, some banks are predicting oil supplies will reduce in coming years as governments and investors move towards more environmentally-friendly energy supplies. Due to the law of supply and demand, lessening oil production will likely boost oil prices in the long term.

It’s possible the surge in energy commodity prices that could be boosting the AGL share price and the energy sector higher today, might be an ongoing boom.

The post Why is the AGL (ASX:AGL) share price having such a good start to the week? appeared first on The Motley Fool Australia.

More reading

• These are the 5 highest yielding dividend stocks in the ASX 200
• Why has the AGL (ASX:AGL) share price climbed 14% in a month?
• Own AGL shares? Here are the World Energy Markets Observatory’s future priorities
• Could the AGL (ASX:AGL) share price reach $7.50 by the end of 2021?
• AGL (ASX:AGL) share price slumps amid expert’s warning of earlier coal exit

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Rhythm Biosciences Ltd (ASX: RHY) share price is lifting in early trade today as the medical technology company released an investor presentation.

At the time of writing, Rhythm Biosciences shares are changing hands at $1.50 each, signifying an 11% gain on the day.

Here are the details out of Rhythm’s camp today.

What was announced?

Rhythm gave a presentation regarding its “simple, low-cost blood test for the early detection of colorectal cancer”, known as ColoSTAT.

The company explains that ColoSTAT is a disruptive and transformative technology that is significantly cheaper and easier to administer than competing tests.

In fact, the assay format of ColoSTAT is designed to “integrate with existing pathology lab infrastructure” using a combination of a test kit and an algorithm to analyse the results.

It appears the company expects tremendous growth for the industry, forecasting a US$38 billion total addressable “screening value” and a total addressable market of 771 million people.

It forecasts it has the potential to reach 1 billion people if the screening age is lowered to 45 years old. This is based on what the US Preventative Services Task Force is currently advocating.

If Rhythm wants to successfully commercialise the product, its tests “must demonstrate both sensitivity greater than or equal to 74% and specificity greater than or equal to 90%”.

According to the company, it would meet these requirements in the US now “based on the study 6 performance of 84% sensitivity and 95% specificity”.

Aside from this, the company has also filed intellectual property (IP) patents in all its major target markets.

The patent, which expires in 2031, has been granted in a number of jurisdictions with just India pending.

Rhythm is targeting initial revenues for the product in late 2022 and it has already commenced its “platform technology pipeline for additional cancer detection tests”.

What’s next for Rhythm Biosciences?

The presentation also contained several “future value inflection points” that may weigh in on the Rhythm Biosciences share price.

It stated that it expects CE Mark submission and approval in Europe to be completed in late 2021. At the same time, it has progressed regulatory post-clinical trial recruitment in Australia for its “Study 7”.

As well, it will continue progressing its IP approvals in different markets while building out its sales and distribution channels for ColoSTAT.

Rhythm Biosciences share price snapshot

The Rhythm Biosciences share price has been an outsized winner this year to date posting a return of 72% since January 1. Indeed, it’s up almost 14% over the last month alone.

On a 12 month basis, the company’s shares have rallied an incredible 618%.

These results have far outpaced the S&P/ASX 200 Index (ASX: XJO)’s climb of around 21% over the same time.

The post Why is the Rhythm Biosciences (ASX:RHY) share price up 11% on Monday? appeared first on The Motley Fool Australia.

More reading

• Why is the Rhythm (ASX:RHY) share price climbing 10% today?

The author Zach Bristow has no positions 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 Bruce Jackson.

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The Dacian Gold Ltd (ASX: DCN) share price is leaping higher today, up 9% in early afternoon trade to 25 cents per share.

Gold prices, meanwhile, edged up overnight to US$1,793 per troy ounce.

Below we take a look at the ASX gold explorer’s latest drill results that look to be driving investor interest.

What gold results were reported?

The Dacian Gold share price is surging after the company reported promising gold drilling results at the Heffernans and Ganymede open pits at its Mt Morgans Gold Operation, located in Western Australia.

According to this morning’s release, the drill campaign intersected mineralisation at depth in the Jupiter syenite intrusive system, “at the limit of, and below the Mineral Resource estimate”.

Dacian reported that drilling beneath its Heffernans open pit intersected 102.9 meters at 1.4 grams of gold per tonne from 436.3 metres, including 14.7m at 7.2g/t from 468 metres.

Meanwhile, drilling below its Ganymede open pit intersected 44.5m @ 1.1g/t from 247.1m, including:

• 3m @ 1.4g/t Au from 247.1m
• 2m @ 1.0g/t Au from 269.5m

Commenting on the results, Dacian’s managing director Leigh Junk said:

These results demonstrate extensions to mineralisation below our active mining areas which can have high-grade and significant width. The Jupiter complex represents a compelling exploration target, and the potential to extend our current operations located adjacent to our processing plant is extremely exciting. This success follows a disciplined, systematic approach by our exploration team.

The first 4 holes of the drill program at Heffernans and Ganymede are now completed. And Dacian reported it has a follow up drilling program already underway at Heffernans, with 7 more holes planned to test extensions of the intersection.

Dacian Gold share price snapshot

The Dacian Gold share price has struggled this year, down 48% so far in 2021. By comparison the All Ordinaries Index (ASX: XAO) is up 12% year-to-date.

Over the past month, Dacian Gold’s shares have gained 14%.

The post Why the Dacian Gold (ASX:DCN) share price is leaping 9% today appeared first on The Motley Fool Australia.

More reading

• Why is the Rhythm Biosciences (ASX:RHY) share price up 11% on Monday?
• Here’s why the Kuniko (ASX:KNI) share price is climbing today
• Could the Santos (ASX:STO) share price hit $10 by the end of 2021?
• Why the Essential Metals (ASX:ESS) share price is surging 8% today
• What’s the latest on the iron ore price?

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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The Kuniko Ltd (ASX: KNI) share price is pulling ahead on Monday. While some of its exuberance has been lost since early morning trade, shares in the mineral exploration company are up 1.96% to $2.08. However, shortly after the opening bell, the Kuniko share price jumped to $2.34, an increase of 14.7%.

Above-average trading volume has flowed through Kuniko this morning following the release of assay results from its newly acquired Nord-Helgeland Project and other battery metals projects.

Encouraging findings

Investors are bidding up shares in the relatively new ASX-listed minerals explorer this morning. Excitement has trickled through the markets as shareholders absorb the latest assay results from one of the company’s exploration sites.

According to the release, Kuniko has received high-grade results for its Nord-Helgeland Project in Northern Norway. The assays have been carried out on historic mine dumps and workings across the Feøy, Romsås and Skuterud Projects. These results confirm the potential of the aforementioned projects.

Furthermore, grades of up to 14.35% copper and 1.74% nickel have been obtained from waste pit samples at Karmøy and Feøy. Positively, the mining company believes there might be scope for further exploration around the pegmatite field of its Nord-Helgeland Project. As a result, investors are pushing the Kuniko share price upwards today.

Kuniko ($KNI) announces encouraging assay results achieved from historic mine dumps and workings at its battery metals projects and initial field results from its newly acquired Nord-Helgeland Project.

Read More https://t.co/NtAfLNpyii #NetZero2050 #Copper #Nickel pic.twitter.com/jw3tAfI0RI

— Kuniko Limited (@KunikoLtd) October 24, 2021

https://platform.twitter.com/widgets.js

The findings are another step towards refining Kuniko’s drilling targets for 2022.

CEO Antony Beckmand commented on the assay results:

These assay results are strongly encouraging, reinforcing our knowledge of the available datasets, and telegraphing the valuable potential of our portfolio of battery metals projects in Norway. Further, there is clear potential for further exploration of the pegmatites in our newly acquired Nord-Helgeland Project which may provide an opportunity to expand our interests into valuable technology metals.

Additionally, the zero carbon-focused battery metals company is likely gathering attention today on the back of the Australian government’s 2050 net-zero deal. While the details of the deal aren’t yet public, the move could create a tailwind for sustainably-geared investments.

Kuniko share price snapshot

Since commencing trading on the ASX, the Kuniko share price has enjoyed an enviable run. In a little more than 2 months, the mineral explorer’s shares have soared 145%. For comparison, the S&P/ASX 200 Index (ASX: XJO) has slipped 0.7% during that time.

The post Here’s why the Kuniko (ASX:KNI) share price is climbing today appeared first on The Motley Fool Australia.

More reading

• Why is the Kuniko (ASX:KNI) share price soaring 13% on Monday?

Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

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The Santos Ltd (ASX: STO) share price has been a solid performer on Monday.

In early afternoon trade, the energy producer’s shares are up 2% to $7.19.

This latest gain means the Santos share price is now up 12% since the start of the year.

Could the Santos share price reach $10.00 by the end of 2021?

The good news for shareholders is that one leading broker still sees plenty of upside for the Santos share price.

According to a note out of Morgan Stanley this morning, its analysts have retained their overweight rating and lifted their price target on the company’s shares to $10.20.

Based on where the company’s shares are trading today, this implies potential upside of approximately 42% for investors.

In addition to this, Morgan Stanley has forecast a 24.3 cents per share dividend in FY 2022. If we add this into the equation, the total potential return stretches beyond 45%.

All in all, it appears as though this broker sees scope for the Santos share price to be trading around the $10.00 mark come the end of the year.

What did the broker say?

The note reveals that Morgan Stanley is bullish on Santos due to its expectation of higher LNG prices.

Its analysts have upgraded their long term LNG price forecasts by almost a third to US$10 per Metric Million British Thermal Unit (MMBtu). This is largely on the belief that demand in Asia will increase materially.

It commented: “We think Asia will consume significantly more natural gas in the early phases of the energy transition […] This will lead to higher LNG prices and better project return, improving investor sentiment towards these projects.”

In addition to this, the broker suspects that M&A activity may continue to heat up. This follows a number of transactions in the sector including BHP Group Ltd (ASX BHP) merging its petroleum assets with Woodside Petroleum Limited (ASX: WPL).

This could make the Santos share price one to watch in the coming months.

The post Could the Santos (ASX:STO) share price hit $10 by the end of 2021? appeared first on The Motley Fool Australia.

More reading

• Big banks’ forecast could mean extended tailwinds for ASX 200 energy shares
• 5 things to watch on the ASX 200 on Monday
• What this top broker thinks of the Santos (ASX:STO) share price
• 5 things to watch on the ASX 200 on Friday
• ASX 200 energy shares take a breather, broker sees “lot of upside risk” for oil

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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The Essential Metals Ltd (ASX: ESS) share price is off to the races, up 8.11% in afternoon trade to 20 cents per share.

Below, we take a look at the asset sale announcement from the ASX lithium and gold explorer that looks to be driving investor interest.

What asset sale was reported?

The Essential Metals share price is rocketing after the company reported it will divest its 51% interest in the Mavis Lake Lithium Project, located in Canada.

Essential Metals’ Joint Venture partner International Lithium Corporation, is also divesting its interest, giving 100% of the project to Critical Resources Ltd (ASX: CRR) under an Option Agreement. The Critical Resources share price is up 12.90% at time of writing.

According to the release, the divestment will realise $1.6 million in cash and shares, along with $1.5 million in cash that’s linked to certain milestones for Essential.

Critical Resources will pay $175,000 for the right to acquire 100% of the Mavis Lake Lithium Project. If it elects to go through with the deal, it will pay $1.5 million in cash and 68 million in Critical Resources shares, valued at 2.2 cents per share. That’s significantly below the current 3.6 cents per share.

Essential Metals and International Lithium Corporation will share the proceeds equally.

Additionally, the Essential Metals share price could be getting a lift from the report that milestone payments totalling $3 million may be received subject to the definition of a lithium resource at the project.

Commenting on the divestment, Essential Metals’ managing director, Tim Spencer said:

The strong interest in lithium has allowed Essential and ILC to monetize an early-stage, non-core asset on favourable terms. Retaining upside exposure via a shareholding in Critical Resources means we will benefit from any success the Critical Resources team has in advancing Mavis Lake.

We will continue to focus our efforts on the company’s first-class West Australian lithium and gold projects.

Spencer said rapidly advancing the company’s Pioneer Dome Lithium Project in Western Australia’s Eastern Goldfields was the highest priority.

Essential Metals share price snapshot

The Essential Metals share price is up an impressive 150% year-to-date. By comparison the All Ordinaries Index (ASX: XAO) has gained 12% so far in 2021.

Over the past month, Essential Metals shares have lost 9%.

The post Why the Essential Metals (ASX:ESS) share price is surging 8% today appeared first on The Motley Fool Australia.

More reading

• Essential Metals (ASX:ESS) share price rockets 29% on lithium update
• Essential Metals (ASX:ESS) share price tumbles 20% on lithium update

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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