Why is the Northern Minerals (ASX:NTU) share price taking a dive today?

The Northern Minerals share price is down nearly 7% today. Let’s look at the company’s latest announcement.

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The Northern Minerals Ltd (ASX: NTU) share price is down nearly 7% today, despite a positive drilling announcement out of the company this morning.

At the time of writing, the Northern Minerals share price is sitting at 4.3 cents per share.

So who is Northern Minerals?

Northern Minerals aims to be a “principal supplier of ethically produced Rare Earth Metals and separated products from the world’s largest Heavy Rare Earth Element inventory within 10 years.”

The company’s flagship project is the Browns Range Project in Western Australia. This site is presently being tested for deposits and prospects that contain high value dysprosium and other heavy rare earths (HREs).

First Browns Range drilling results indicate potential

In this morning’s announcement, Northern Minerals reported “encouraging assay results across several targets” from the first phase of its latest exploration drilling program at the Browns Range Project.

Northern Minerals further advised that it had received the best assay results (so far) from its Toad prospect. The company plans to commence follow up drilling once the northern wet season ends. 

Northern Minerals also continues to drill holes at three other prospects: Gambit West, Dazzler North/Northwest and Wolverine West.

In early November 2020, the company first announced that it had commenced a $5 million exploration program to finish before the end of June 2021. 

What’s ahead for Northern Minerals in 2021?

Northern Minerals CEO Mark Tory commented on what’s coming up for the company:

Our overall strategy remains to increase the Mineral Resource and the life-of-mine potential at Browns Range to more than 20 years. This will feed into a future feasibility study for a potential commercial scale heavy rare earths operation at Browns Range.

Regarding the unveiling of today’s results, he added: “Following up on these results will be one component of the second phase of our exploration drilling campaign, which we will be back on the ground to complete before the end of June.”

Northern Minerals has a market cap of 203.9 million and 4.4 billion shares outstanding. Over the past six months, the Northern Minerals share price has climbed over 140%.

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Motley Fool contributor Gretchen Kennedy 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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