Dreadnought Share Price Breaks Five Year Record then Drops 7%

Dreadnought Share Price Breaks Five Year Record then Drops 7%

This week, mineral explorer Dreadnought Resources Ltd’s [ASX:DRE] share price has reached its highest price in five years.

Thanks to a slew of announcements from its Illaara and Rocky Dam gold projects, DRE’s share price has pushed 50% higher this week.

With a fresh announcement out this morning, the DRE share price has dropped 7.69% to trade at 1.2 cents per share.

But not before hitting 1.4 cents, a price not seen since July 2015.

ASX DRE Share Price Chart 1

Source: Tradingview

When we last looked at DRE on Monday, we explored previous resistance levels based on the price of one-cent.

Given the recent price action, I think it could be a good opportunity to analyse DRE latest set of announcements.

All hands on deck for Dreadnought Resources

It’s been a busy week for the explorer, with announcements made on the ASX every day this week.

The biggest jump in share price this week came on the back of new from DRE’s Illaara project on Tuesday.

The exciting thing about Illaara is that it’s located 160km northwest of Kalgoorlie in the Yilgarn Craton.

Yilgarn has been a popular geological area recently (make sure you catch up on all the action here).

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ASX DRE Dreadnought Resources Illaara Gold Project

Source: Dreadnought Resources

Rock and chip sampling at Metzke Find points to three new potential gold targets.

Meaning there are now defined drill targets in the area for DRE to start exploring beneath the surface.

Sampling on the surface provided significant gold mineralisation, up to 18 grams of gold per tonne in one area.

Today’s announcement was a little less straight forward.

In fact, it is a little tricky to gauge how investor have reacted to it.

Illaara is believed to sit on what is called a Volcanic Massive Sulphide system (VMS).

Without a lesson in geology, VMS systems are associated with copper-zinc deposits that can include gold.

Which might be cause for a bit of uncertainty in the share price.

It might take someone with a degree in geology to decipher what this morning’s announcement means.

Basically, DRE’s findings today are an encouraging indicator that there is a VMS system on their tenements.

Where to for the DRE share price?

Is today’s news good or bad?

It’s a good thing if the VMS contains gold.

But bad for investors if it doesn’t — VMS can host a wide range of base metals, so it’s not a complete loss.

Drilling has returned trace amounts of gold below the surface along with a range of other metals, such as silver, copper, and nickel.

In my opinion, there isn’t much to go on with today’s news.

The drill holes from the Rodney, Warspite, Reindler’s and Bismarck VMS targets aren’t the high-grade gold finds we’ve become accustomed to recently.

But do keep in mind these are early days.

DRE said we can expect results form Metzke Find’s later this month, along with additional drill targets from geological mapping at Illaara.

We’ll be sure to keep you updated with developments from some of Australia’s most interesting gold explorers and miners. In the meantime, make sure you subscribe to The Daily Reckoning Australia. It’s a great way to stay ahead of the curve when it comes to Australian gold stocks. It’s free too. Subscribe here.

Kind Regards,

Lachlann Tierney,

For The Daily Reckoning Australia