Why did the Sunstone Metals (ASX:STM) share price slump 15% today?

ASX resource explorers are active all across the world

| More on:
Side-on view of a devastated male investor laying his head on his laptop keyboard

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Sunstone Metals Ltd (ASX: STM) share price finished deeply in the red today, down 15.45% to 9.3 cents.

Below we look at the latest drilling update from the ASX resource explorer, which appears not to have sufficiently roused investor spirits following earlier positive reports that saw the Sunstone Metals share price rocketing last week.

What drilling results were reported?

The Sunstone Metals share price fell hard today despite the company reporting positive assays from its El Palmar deposit in Ecuador. The company said the assays confirm the deposit is a significant gold-copper porphyry discovery.

The results from the latest drill hole included:

  • 1 metres at 0.75grams of gold per tonne and 0.20% copper from 32 metres
  • Within 259.6 metres at 0.41g/t gold and 0.14% copper from 10.4 metres

Assays are pending on 3 other completed drill holes with a fourth currently underway. Sunstone said all the drill holes to date are mineralised from shallow depths.

Commenting on the results, Sunstone’s managing director Malcolm Norris said:

This is a big system and has huge potential. It is early days, but importantly every hole has been mineralised… We are seeing some evidence that the first seven holes are defining the upper parts of a large porphyry system with multiple mineralising intrusions emplaced into wallrocks. Given this, we are increasingly excited about the deep targets and the potential for the mineralisation to have a vertical extent of more than 1 kilometre.

Norris also said the company will commence drilling its second hole at the high-grade Alba gold target on the Bramaderos project, also in Ecuador, this weekend. He added the company is well-funded to explore both projects, with approximately $19 million in cash and equities.

Speaking of the Bramaderos project, it was drill results from this site that look to have triggered a massive spike in the Sunstone share price last week.

Sunstone Metals share price retreats after surging 100% in days

Last Thursday, 18 November, the Sunstone Metals share price closed the day up by more than 50%.

As the Motley Fool reported on the day, “The company advised that it has obtained ‘exceptional’ assays from the first drill hole at its Alba target located at the Bramaderos site”.

Shares finished flat last Friday and gained another 10% on Monday.

Some profit-taking looks to have taken place on Tuesday, with the Sunstone Metals share price finishing down 13%, only to bounce back yesterday, finishing up 10%.

This leads us to speculate that today’s 14% fall could have been driven by another round of profit-taking.

To see why, here’s how Sunstone Metals shares have been moving.

Sunstone Metals share price snapshot

Over the past 12 months, the Sunstone Metals share price is up an eye-popping 840%. And that’s factoring in today’s retrace. For some comparison, the All Ordinaries Index (ASX: XAO) has gained 12% over the past full year.

The past week has seen some continuing remarkable moves. From last Tuesday, 16 November through to the end of trading on Monday, the Sunstone Minerals share price almost doubled.

While shares are down 21% now since Monday, bear in mind the Sunstone is still trading 57% higher than it was this time last month.

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

A woman is excited as she reads the latest rumour on her phone.
Resources Shares

Obscure ASX mining share surges 29% following OZ Minerals copper deal update

Shareholders are set to vote on the proposal later this month.

Read more »

A futuristic view of electric vehicle technology with speeding bright light trails indicating power.
Resources Shares

New records and looming deficits. Why ASX lithium stocks are in the spotlight

Demand for lithium is booming alongside rocketing growth in EV production, sending the price of the battery critical metal up…

Read more »

Female worker sitting desk with head in hand and looking fed up
Resources Shares

Can the iron ore price regain its March highs in 2022?

Opinion is mixed on the outlook for the commodity.

Read more »

Young woman using computer laptop with hand on chin thinking about question, pensive expression.
Resources Shares

Down 20% in 6 months, what’s next for the BHP share price?

It’s been tricky for BHP shareholders recently. Can things turnaround?

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Share Gainers

Here are 2 ASX lithium shares surging on new discoveries

Demand for lithium continues to see high realised spot prices, with a positive flow-on effect to ASX lithium stocks.

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Resources Shares

Up 80% in a month, why is the Province Resources share price on ice today?

What's going on with the minerals producer’s stock? We take a closer look.

Read more »

A miner reacts to a positive company report mobile phone representing rising iron ore price
Resources Shares

Guess which ASX mining share is rocketing 55% on a new lithium find

Ragusa Minerals is getting ready for its maiden drilling program at its NT Lithium Project.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Still down in 2022, is the Fortescue share price now on the road to recovery?

Let's see what the consensus amongst analyst is.

Read more »