Firefinch (ASX:FFX) share price tumbles 6% but remains 12% higher for the month

The gold miner and lithium developer is having a tough day on the ASX

| More on:
Upset man in hard hat puts hand over face

Image source: Getty Images

The Firefinch Ltd (ASX: FFX) share price is deep in the red today.

Shares in the gold miner and lithium developer are currently trading 5.84% lower at 64.5 cents apiece, having at one stage been as low as 63 cents.

Let’s take a look at what’s been dragging Firefinch shares lower.  

What’s happening with Firefinch?

Investors have been quick to dump their shares in Firefinch today. Despite the bearish price action, the mining developer has not released any price-sensitive news.

As a result, there are a couple of catalysts that could explain why the Firefinch share price is struggling today.

Firstly, weakness in the spot gold price could be dragging shares in Firefinch lower. According to CNBC, the spot gold price is down 2.3% to a 1-month low of US$1,754.10 an ounce.

A second factor could be investors looking to lock in their profits after the recent rally in the Firefinch share price.

More on Firefinch

The Firefinch share price has been receiving increasing attention over the past few weeks.

Most recently, the company made headlines after announcing details of its inclusion in the VanEck Junior Gold Miners ETF (NYSE: GDXJ) via Twitter Inc (NYSE: TWTR). However, the gold miner and lithium developer retracted the tweet and provided clarification on the error.

Prior to the tweet clarification, shares in Firefinch rallied strongly after the company released a mixed half-year report.

The company realised gold production of 22,525 ounces for the half-year in line with guidance of 21,000-23,500 ounces. However, Firefinch’s net loss for the half-year grew to $6.28 million from $1.07 million.

Firefinch share price snapshot

Firefinch has several promising assets located in Mali. This includes the Morila Gold Mine, in which Firefinch has an 80% interest.

Firefinch runs the Goulamina Lithium Project in Mali, which is a joint venture with the Chinese lithium and chemicals company Jiangxi Ganfeng Lithium Co Ltd.

Despite sinking 7% in today’s session, shares in Firefinch remain 12% higher for the month.

Shares in the gold miner and lithium developer have also been strong for the majority of the year. Since the start of 2021, shares in Firefinch are up an astronomical 250%.

Should you invest $1,000 in Firefinch right now?

Before you consider Firefinch, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Firefinch wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Twitter. 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.

More on Resources Shares