Why is the Dreadnought Resources (ASX:DRE) share price down 7% today?

The minerals explorer has crept down after hitting a 52-week high a week ago.

Dreadnought Resources Ltd (ASX: DRE) finished the month of July on a busy note, with eight updates provided to the market before the month's end.

Despite this, the Dreadnought Resources share price has given away 37% from its five-year high on 23 June.

At the time of writing, the Dreadnought Resources share price is down almost 7% at 4 cents apiece.

Here we cover the tension points in the Dreadnought share price lately.

A businessman holds his glasses in concern, indicating uncertainly in the ASX share price

Image source: Getty Images

Quick refresher on Dreadnought Resources

Dreadnought is an exploration company with expertise in the development of gold and other natural resource assets in the Northern Territory, Australia.

The Dreadnought Resources share price hit its 52-week high on 23 June at 6.2 cents. Dreadnought has a market capitalisation of $111 million at the time of writing.

Quarterly results fail to gain market's attention

Dreadnought released its quarterly activities report on 30 July. It contained several progress updates at the company's 3 core projects.

Dreadnought completed a number of surveys and reverse circulation (RC) drilling programs in the quarter just past.

In the report, Dreadnought also detailed an "option agreement" the company entered into regarding the base metal rights at its Mangaroon site.

As per Dreadnought's report, the agreement is structured in the following way:

The option provides FQM with the right, following the completion of an exploration program funded by FQM, to earn a 51% interest in Mangaroon by spending $15m and a further 19% interest by sole funding all expenditure up until a decision to mine

Dreadnought shares have fallen 7% since the release of its quarterly activities report.

Before this update, on 26 July, the company announced it had exercised a conversion of 109,090,909 ordinary, fully paid shares via 600,000 convertible notes as per the noteholders.

Selling pressure has continued on Dreadnought shares since this event until today.

There is no market-sensitive information for the company today so it appears these recent events may have an implication on the Dreadnought Resources share price.

Dreadnought Resources share price snapshot

Despite the short-term drop, the Dreadnought Resources share price has lifted 95% year to date and is up 333% over the past 12 months.

These returns have outpaced the S&P/ASX 200 Index (ASX: XJO), which has gained around 26% over the past year.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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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