Why the Santana (ASX:SMI) share price rocketed 40% today

The company's shares outperformed the broader ASX market…

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The Santana Minerals Ltd (ASX: SMI) share price ended the day at a 4 month high following strong drilling results.

At Thursday's closing bell, Santana finished up 40.91% to 15.5 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) settled 1.15% higher to 7,681.3 points.

What were the results?

In its latest release to the ASX, Santana reported significant assay results from the 100% owned Bendigo-Ophir Project.

The company has been conducting its drilling program since November 2020 at four Rise and Shine Shear Zone (RSSZ) deposits. It hopes to upgrade the mine's category to Inferred Gold Resources. This states that the mineral content can be estimated with a low level of confidence.

Santana's drill hole (MDD014) intersected 21.7 metres at 5.7 grams per tonne of gold from 174.3 metres at the northern extent of the Rise and Shine (RAS) deposit. This included:

  • 5.7 metres at 11.19 grams per tonne of gold from 174.3 metres; and
  • 4 metres at 12.60 grams per tonne of gold from 187.0 metres.

The drilling confirmed high-grade mineralisation, extending at least 100 metres further down from the previously reported high-grade mineralisation in MDD007.

Assays from drill holes MDD011, MDD012, MDD013 and MDD014 are still waiting to be received.

The company advised that diamond drilling is continuing northwards to further fast-track additional gold resources with a focus on down-plunge extensions.

Santana executive director, Dick Keevers commented on the positive results:

This high-grade gold intersection in diamond drill hole MDD014 at the top of the mineralisation over 21.7 meters of partial assays urgently completed, has demonstrated that high-grade gold zones are common at RAS, where further drilling in progress will determine their geological continuity.

Santana share price summary

Despite today's massive gain, Santana shares have lost around 30% over the past 12 months. Although when looking at year-to-date, its shares are slightly better, just below 20%.

Santana commands a small market capitalisation of roughly $12.54 million and has approximately 114 million shares on its books.

Motley Fool contributor Aaron Teboneras has no position 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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