Caspin Resources Ltd (ASX: CPN) shares started the day’s trading horrendously with 18% scalped from their previous close since the market opened.
The mineral explorer’s shares are on the move despite there being no market-sensitive information for the company today.
However, previous updates released over the past few days may help explain the price action in Wednesday’s session.
Let’s take a closer look.
Why is the Caspin Resources share price plummeting today?
There’s nothing remarkable coming out of the company’s camp today that could directly explain the dramatic movements in its share price.
However, Caspin released a note yesterday that explained it had obtained the first results from its reverse circulation (RC) drilling program at its Yarawindah Brook PGE-Nickel-Cobalt project in WA.
The update was made by the board “out of an abundance of caution” in response to an ASX-penned letter inquiring about Caspin’s share price movement on 14 October.
Due to the nature of the ASX’s investigative letter, which does not imply any wrongdoing from Caspin, the company decided to provide an update regarding its RC drilling program results at Yarawindah Brook to clear the air and ensure no stones were left unturned.
The update notes that drill results came from the first 3 holes while assays from the remaining 8 holes are still pending. The company said further and more detailed analytical interpretation is required on all 11 sets of results.
Caspin also advises that it “will require additional drill results…to complete a thorough interpretation of these [11 holes] drill results”.
Consequently, the company also advised that investors should keep that in mind when examining the exploration results it announced yesterday.
With this context, Caspin explained the first 3 drill holes were “originally designed to test what was originally interpreted to be the prospective eastern margin of the [mineral] intrusion”.
It also explained that RC drilling will recommence this month at Yarawindah after being temporarily paused due to soggy ground conditions that reduced access to some sections of the project.
Caspin also explained there is no way of knowing when the assay laboratory will be finished with its interpretations.
In light of this, investors appear to be spooked and are exiting their positions at a rapid pace, hence, the drop in the Caspin Resources share price today.
At last check, shares in the minerals’ exploration company were trading at 86.5 cents, a significant fall from the previous close of $1.06.
Caspin Resources share price snapshot
The Caspin Resources share price has enjoyed bathing in a pool of green this year to date, having posted a return of 63% since January 1.
This extends its gain over the last 12 months to 92%, well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s climb of about 19% during the same time.