Cannindah Resources (ASX:CAE) share price rockets 21% after ASX response

Investors are piling into Cannindah today.

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Key points

  • Compliance officers with the ASX wrote to Cannindah yesterday requesting more information about recent trading activity.
  • Cannindah has eclipsed an 82% gain in the last week of trading, sparking the ASX interest.
  • The company did note note a presentation made at its AGM from December 2021 regarding assay due in early January 2022.
  • In the last 12 months, the Cannindah share price has soared over 1000%.

Shares in mining exploration company Cannindah Resources Ltd (ASX: CAE) are cruising well ahead of all benchmarks today. At the time of writing, stock in the company is now trading 20% higher at 35.5 cents apiece.

Momentum has been strong this past week for Cannindah, with shares bounding off a low of 21 cents on Monday.

As such Cannindah has eclipsed an 82% gain in the last week of trading, and the ASX hasn't overlooked the feeding frenzy either.

Compliance officers with the ASX wrote to Cannindah yesterday requesting more information about this trading activity, in search of any potential explanation from the company, to which it replied today. Let's take a look.

Why's the Cannindah share price soaring today?

The ASX wrote to Cannindah asking if it were aware of any information that could explain the recent trading in its securities, to which the company replied "no".

However, when prompted for an explanation in the absence of any such information, Cannindah was a little more forthcoming.

Whilst the company acknowledged that there is no reason "relating to its activities or its financial position that would give rise to the price change", it did note a presentation made at its AGM from December 2021.

In its AGM, the company noted that assay results from the balance of hole 4 and for holes 5 to 8 from the Mt Cannindah project were due in "early January 2022".

Hence the company appears to think there is some speculative trading activity surrounding the timing of this announcement, as is often the case in news-sensitive sectors like mining and biotech for example.

Although, Cannindah advised that "results from the remainder of hole 4 through to hole 8 have yet to be received, reported and interpreted".

Aside from this point, Cannindah also said its shares are tightly held by a large major shareholder, along with "a number of long-term shareholders", and that trading activity by these players from 14 to 18 January 2022 is "likely to inspire significant price movements".

Otherwise, there are no other reasons that Cannindah can allude to that pinpoints the recent uptick in price and volume of its shares.

Regarding the assay results from above, the company says it will update the market as soon as the geological reporting is on hand.

Cannindah Resources share price summary

In the last 12 months, the Cannindah share price has soared over 1000% in an impressive display on the chart.

After this most recent rally, shares have climbed another 103% and are up more than 82% in the last 5 days of trading.

The author has no positions 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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