Why the De Grey Mining (ASX:DEG) share price is dropping today

The De Grey Mining Limited (ASX:DEG) share price is on the move on Thursday morning. Here’s what you need to know…

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The De Grey Mining Limited (ASX: DEG) share price is under pressure on Thursday despite the release of a positive announcement.

At the time of writing, the De Grey share price is down over 1% to $1.22.

What did De Grey announce?

This morning the gold-focused mineral exploration company announced drilling results from the Eagle and Diucon zones of its Hemi prospect in Western Australia.

According to the release, the mineralisation at Diucon and Eagle has been extended strongly following recent drilling activities.

At Eagle, the mineralisation has been extended to approximately 600 metres strike, 300 metres depth, and remains open to the north, west and at depth.

Whereas at Diucon the mineralisation width has extended to approximately 200 metres with new lodes intersected across strike. The Diucon strike is currently approximately 900 metres and mineralisation remains open at depth and beneath sediments to the west.

Another potential step change

De Grey’s Managing Director, Glenn Jardine, was very pleased with the drilling results. He suggested that they could represent another step change to the gold endowment at the highly promising Hemi prospect.

He commented: “Diucon and Eagle potentially represent another step change to the gold endowment at Hemi. Both zones remain open along strike and at depth. RC drilling is currently on 160m spaced sections and 80m spaced collars on section. We have demonstrated 900m and 600m strike lengths respectively at Diucon and Eagle with significant grades and widths downhole. Mineralisation remains open along strike and at depth with multiple stacked lodes in places. RC drilling to determine overall scale along strike continues and diamond drilling of potential down dip extensions is expected to commence during the quarter.”

Why is the De Grey share price dropping?

While today’s announcement is a positive, it hasn’t been enough to stop the De Grey share price from dropping.

News that the gold price pulled back overnight appears to have offset today’s update.

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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. 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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