Why European Cobalt Ltd shares plunged 35% lower today

One of the worst performers on the market today has been the European Cobalt Ltd (ASX: EUC) share price.

In morning trade the cobalt miner’s shares have fallen as much as 35% to 11 cents.

Why have its shares sunk lower today?

This morning European Cobalt released the drilling results from the first four holes at its Dobsina project in Slovakia.

As you might have guessed from the share price reaction, unfortunately the grades from the results were quite weak and fell well short of what many in the market had expected.

But it is worth remembering that it is still early days and there is more drilling to come. So all may not be lost just yet.

However, I wouldn’t be in a rush to buy the dip. If future results continue to show grades of this level then I think even the most optimistic shareholder would consider heading to the exits.

In light of this, I think investors ought to keep European Cobalt on their watch list and look out for improvements in its future drilling results.

In the meantime, investors might be better off considering miners such as BHP Billiton Limited (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG).

While they may not be as exciting as the mineral exploration companies, I expect they could provide market-beating total returns in 2018.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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