The Resources & Energy Group Ltd (ASX: REZ) share price took a 33% dive on open following its drill results this morning.
Let's take a look.
About the company
Resources & Energy is a gold explorer, developer and producer with projects in Western Australia and Queensland.
In Western Australia, the company's flagship site is the East Menzies Gold Project, situated 130km north of Kalgoorlie. The site represents a 112sq km package of contiguous mining, exploration and prospecting licenses.
In Queensland, the company has a 12sq km mineral development licence over the Mount Mackenzie Mineral Resource. An initial scoping study for the project shows a positive net $63 million of free cash.
Resources & Energy share price surge in October
The Resources & Energy share price surged more than 200% on 20 October following the discovery of a new high-grade zone of gold mineralisation with a peak result of 76.4 gt/au. This was at the Gigante Grande Prospect situated at its East Menzies Gold Project.
Resources & Energy executive director Richard Poole said the results supported "the overwhelming evidence that the East Menzies Gold Field is one of Australia's best and most overlooked exploration target areas".
Drill results
The gold miner announced its drilling results from its Gigante Grande prospect today. They showed the drill holes, which were targeting a potential continuation of mineralisation, resulted in a peak assay of 3.85 gt/au.
As a result, the Resources & Energy share price opened 33% lower and is currently trading near its intraday lows, down 29.5% at 7.4 cents. The bar may have been set too high after its previous high-grade zone discovery or its share price may have been pumped too high. Nonetheless, investors were clearly far from impressed with today's drill results.
Resources & Energy has previously delivered an announcement under similar circumstances where the market was not impressed. On 3 November, the company announced a resource upgrade at its Goodenough Project located within the central west part of the East Menzies Gold Project. In what appears to be a positive announcement, the Resources & Energy share price slipped 5% lower on the day.
