The De Grey Mining Limited (ASX: DEG) share price spiralled upwards in June, hitting highs of 97 cents, which represents a whopping 107% increase for the month. It's clear the mining explorations share has thrown aside all worry of the coronavirus pandemic, climbing a huge 1,460% this year so far.
Since the end of June, De Grey's share price has retracted some of its gains and is now sitting at 78 cents at the time of writing.
Why did the De Grey share price take off in June?
De Grey's exploding share price saw its market cap soar above $1 billion as the company was added to the S&P/All Ordinaries Index (ASX: XAO) for the first time in mid-June.
De Grey is a small ASX miner that specialises in gold, silver and base metals. The De Grey share price has been driven up by the gold price in 2020 as investors understand that De Grey's profitability is influenced by 3 factors: how much gold it can mine, the gold price, and how much it costs the company to extract the gold.
In June, there was a persistent stream of good news from De Grey, largely out of its Hemi discovery zone:
- On 5 June, the miner announced it was extending its Hemi drilling site in Western Australia, which sent the De Grey share price skyrocketing 31% in one day.
- In the same release, De Grey also announced its new Brolga extension at its Hemi site, which has now returned "excellent" gold discoveries just one month later.
- On 9 June, De Grey provided a drilling update on its Aquila zone within the Hemi site, which revealed the discovery of broad, high-grade gold extensions at Aquila. It also confirmed wide spaced drilling was advancing to the west of Aquila, and the discovery of encouraging finds approximately 500m to the west of Aquila.
- On 22 June,De Grey announced additional high-grade gold finds at Hemi, including a further 8 gold discoveries from the Aquila zone, along with news that it was planning a further expansion. The subsequent couple of days saw the De Grey share price rise a staggering 39%.
Foolish takeaway
Gold is viewed by many investors as a 'safe haven' asset and an effective portfolio hedge against economic uncertainty, and the De Grey share price has been enjoying the large tailwinds arising from the strong gold price over the past few months.
At the time of writing, the De Grey share price is down by 8.24% to 78 cents per share.
