Cannindah Resources Ltd (ASX: CAE) shares have exploded by as much as 180% today to hit a 5-year high. Investors are responding positively to the news the mineral resources company has identified large amounts of copper and gold at its main site.
At the time of writing, shares in the company have retreated slightly and are swapping hands for 7.9 cents each – up 154.84%. By contrast, the All Ordinaries Index (ASX: XAO) is currently down 0.61%.
Let’s take a closer look at what the miner reported.
What did Cannindah Resources announce?
The Cannindah Resources share price is on fire after the miner declared “significant” deposits of copper, gold, and silver at its Mt Cannindah project in central Queensland.
Some of the ore found at the site include:
- an 82m thick breccia containing 2.32% copper
- a 118.3m thick breccia containing 1.99% copper
- a 36m thick breccia containing 8.65g of gold per tonne
The company claims there is approximately 90,000 tonnes of copper, 60,000 ounces of gold, and over 2.5 million ounces of silver. At current commodity prices, these finds have estimated values of US$806 million, $1.04 billion, and $64.5 million, respectively.
To understand how monumental the find is for Cannindah Resources, keep in mind the mining company’s market capitalisation is about $24 million.
The site is 100% owned and operated by Cannindah Resources.
Future prospects of gold, silver, and copper
Both gold and silver are currently coming off five-year peaks from August last year. Trading Economics forecasts the prices of both metals to continue declining in the near future. However, the gold price is still 16.1% higher than this time last year, while silver is 111.7% higher over the same period.
Copper’s commodity price is expected to continue growing this year, and possibly into next year. Many consider copper’s price to be a reflection of the health of the economy. Since economic woes are expected to improve as COVID-19 subsides, its price is improving.
As well, copper is an essential metal in producing climate-friendly technology. The rise in demand for green technology is fuelling a boom in the naturally abundant metal.
Cannindah Resources share price snapshot
This time last year, one share in Cannindah Resources would have cost the average investor 0.8 cents. Since that time, the value of the company has grown by around 890%. A very tidy return on investment for those with enough foresight.