Why the Ardea Resources (ASX:ARL) share price rocketed 50% today

Shares in the miner hit new highs today…

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Boral share price ASX investor wearing a hard hat looking excitedly at a mobile phone representing rising iron ore price

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Key points

  • The Ardea share price hit a new 52-week-high this week
  • The miner has made a significant discovery at its Emu Lake site
  • The company has found another fertile exploration space at the site

The Ardea Resources Ltd (ASX: ARL) share price has seen a relatively stable 12 months… until now.

This morning, the miner released a positive report regarding its Western Australia exploration site, driving its share price up by as much as 58%.

It has since settled back down to close 77 cents — an increase of 50%.

So what’s so exceptional about this announcement that made the Ardea share price skyrocket?

Let’s take a look…

Significant drill discovery for Ardea

To bring you up to speed — Ardea is a multi-commodity miner with interests in Western Australia.

Its primary focus is to export its resources to the lithium-ion battery sector — meeting the growing demand for electric vehicles and storage.

Its main interests are the Kalgoorlie Nickel Project, the Goongarrie Hub (both being the largest source of nickel-cobalt in the developed world), and its exploration of nickel sulphide within the Eastern Goldfields — all located in WA.

This morning, Ardea announced had “confirmed a high-grade massive nickel-copper-PGE sulphide discovery” at its Emu Lake site within the Eastern Goldfields.

It has successfully found 2.72m at 5.42% nickel and 0.85% copper from a drill hole at 391.04 metres.

According to the miner, the drill site has shown “increased massive nickel and copper sulphide grade and thickness on an intact, basal dacite contact”.

Other zones discovered

It’s not just the sulphide discovery that has Ardea excited.

The company has also opened up an exploration incentive scheme to test the down plunge extension of today’s winning drill hole — an exercise which has been co-funded with the WA government.

It is set to commence exploration once a rig is made available.

Further, CSIRO is set to study the mineralisation of the nickel sulphite found at Emu Lake, determining the massive sulphide within the site.

In addition, the miner has found a precise new fertile target to pursue — deemed the Western Ultramafic-Dacite contact — in which it controls 20km of strike.

Ardea managing director, Andrew Penkethman said:

With Ardea holding 20km of fertile komatiite strike at Emu Lake, there is significant scope to extend this nickel sulphide discovery and make additional discoveries.

I acknowledge the Ardea team and partners such as CSIRO and Newexco for their input which has assisted in developing the Emu Lake “Thermal Erosion” nickel sulphide model which is a major exploration breakthrough for the company, as it has opened up a new search space.

Ardea Resources share price snapshot

Before today, the Ardea share price saw its largest spikes of the last 12 months in February and June 2021.

The first jump came after the miner announced the sale of its Bedonia East project to Moneghetti Minerals Limited, in order to focus on its Kalgoorlie site. The Ardea share price rose 15% in a few days, before dropping again, with announcing a 60 million tonne at 1.0% nickel resource estimate at Goongarrie.

Prices surged again in June, after the miner announced a large interception of nickel sulphide at Emu Lake.

At these two high points, the Ardea share price was at 60 cents and 59 cents respectively.

The company has a market capitalisation of $70.80 million and over 138 million shares issued.

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Motley Fool contributor Alice de Bruin 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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