Why is the De Grey (ASX:DEG) share price plummeting today?

The De Grey (ASX:DEG) share price has plunged 11% to become today’s worst performer on the S&P/ASX200 Index.

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The De Grey Mining Limited (ASX: DEG) share price has plunged to become today’s worst performer on the S&P/ASX200 Index (ASX: XJO).

The De Grey share price hit an intra-day low of $1.24 just before noon, down more than 14% despite no price-sensitive news released today. At the time of writing, shares in the gold explorer have recovered slightly and are currently trading down 10.5% at $1.30.

Let’s take a closer look at what may have affected the company today.

De Grey share price sinks

Since De Grey has not released any price-sensitive news, it’s possible today’s price fall could be a reflection of the volatile spot gold price.

Overnight, the spot gold price touched its lowest intraday price in a week after posting declines over the past two sessions. Gold mining giants Newcrest Mining Ltd (ASX: NCM) and Evolution Mining Ltd (ASX: EVN) are both down marginally today. 

But fellow gold explorer Chalice Mining Ltd (ASX: CHN) has seen its share price fly 6.5% higher today. Could the De Grey share price fall be the result of investors switching from one gold explorer to another?

About the company

De Grey is a mining company based in Western Australia that focuses on gold exploration and development activities. The company has 100% ownership of the Mallina Gold Project in the Pilbara region which is also the site of its flagship Hemi Gold Project.

The Hemi Project is made up of zones including Aquila, Brolga, Brolga South and Crow. De Grey has noted thick and high-grade mineralisation across the project and expects the project to deliver great growth in the future.

Earlier this week, the De Grey share price bolted following positive drill results from the Aquila zone of its Hemi project. According to the update, samples from the top 200vm of the Aquila zone showed consistent and positive mineralisation. The company’s management described the results as “encouraging” with metallurgical test work revealing high gold recoveries.

Earlier in May, De Grey also released positive drill results from its Diucon-Eagle mining sites in the Hemi prospect.

De Grey share price snapshot

Despite today’s fall, the De Grey share price has performed strongly in 2021. Since the start of the year, shares in the gold explorer are up nearly 24% for the year, having hit an all-time high of $1.67 in April. Its shares have lifted 259% over the past 12 months.

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Motley Fool contributor Nikhil Gangaram 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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