Essential Metals (ASX:ESS) share price rockets 29% on lithium update

Lithium prices have been rebounding amid booming battery demand

| More on:

Image source: Getty Images

The Essential Metals Ltd (ASX: ESS) share price is rocketing, up 29% at the time of writing. It had earlier been up by more than 40%.

Below, we take a look at the ASX resource explorer’s latest lithium results that look to be driving investor interest.

What lithium results were reported?

The Essential Metals share price is surging after the company reported positive assay results at its 100% owned Pioneer Dome Lithium Project, in Western Australia.

According to the release, 4 reverse circulation (RC) holes returned “excellent lithium assays and widths” from the Cade Deposit. Essential Metals said the high lithium tenor encountered in the drilling indicates there likely has been minimal depletion of lithium near the surface.

Results from the 4 holes included:

  • 21m @ 1.08% Li2O from surface
  • 24m @ 1.29% Li2O from surface
  • 15m @ 1.06% Li2O from 47m
  • 26m @ 1.46% Li2O from 51m

Commenting on the results driving the Essential Metals share price, managing director Tim Spencer said:

These assay results once again reinforce that the Dome North area hosts a high quality resource with the potential to be mined with minimal overburden. We now need to undertake further drilling and metallurgical test work to advance the project towards development in parallel with more exploration. We will announce the program details as soon as we can finalise the various practicalities and contractors.

The company said it intends to release the results of all the assays from its drilling program towards the end of October.

Essential Metals is planning to start a diamond drill campaign in November to increase its understanding of the area, providing metallurgical test work samples for its Davy and Cade Deposits.

The company is also working on securing a mining lease and conducting the required environmental and hydrology studies to get the project “development ready”.

Essential Metals share price snapshot

With today’s intraday gains factored in, the Essential Metals share price is up an impressive 150% so far in 2021. That compares to a year-to-date gain of 10% posted by the All Ordinaries Index (ASX: XAO).

Over the past month, Essential Metals shares are down around 20%.

Should you invest $1,000 in Essential Metals right now?

Before you consider Essential Metals, 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 Essential Metals 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

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.

More on Resources Shares