Why is the Carnaby Resources share price surging 8% on Monday?

News of an acquisition boosted the company’s stock 8% higher this morning.

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Key points

  • The Carnaby Resources share price is in the green on Monday, at one point gaining 8% to trade at $1.48 
  • Its day in the green follows news that the company is acquiring a new mining lease nearby its Greater Duchess Copper Gold Project 
  • Exploration at the mining lease – dubbed Mount Hope – is expected to begin as soon as possible 

The Carnaby Resources Ltd (ASX: CNB) share price is in the green on Monday following news of a $2 million acquisition.

The copper and gold exploration and development company is purchasing the mining licence for Mount Hope, located near its Lady Fanny and Nil Desperandum copper gold discoveries.

At the time of writing, the Carnaby Resources share price is $1.40, 2.56% higher than its previous close.

However, earlier today it hit a high of $1.48, representing an 8% gain.  

Let’s take a closer look at the news driving the Carnaby Resources share price higher today.

What’s going on with Carnaby Resources today?

The Carnaby Resources share price is taking off on news that the company’s expanding its Greater Duchess Copper Gold Project.

At 1 kilometre long and 500 metres wide, the Mount Hope mining lease covers around 0.5 square kilometres.

According to Carnaby Resources, Mount Hope looks to be hosted in the same iron oxide copper gold structural corridor as its Lady Fanny and Nil Desperandum discoveries.

Historically, it has produced 322,000 tonnes at 1.9% copper. Though, Carnaby Resources notes there’s a “remarkable” shortfall in publicly available or verifiable historical exploration drilling.

The company plans to start a first pass exploration drilling program following the mining lease’s settlement. That’s expected to be in the second or third quarter.

Carnaby Resources managing director, Rob Watkins commented on the acquisition, saying:

Mount Hope is a highly accretive acquisition and another potential corner stone in the rapidly growing Greater Duchess Copper Gold Project.

It is hard to believe that an exploration opportunity like this still exists in the Mt Isa region today.

Ultimately the planned first pass drilling at Mount Hope will tell the story, however the historical production from the shallow pits and the extensive copper mineralisation left in the pit walls and outcropping elsewhere within the mining lease is evidence enough as to its potential.

The company is acquiring the lease from the privately-owned Integrated Global Resources. It will be paying $1 million in cash and the other $1 million in scrip.

Carnaby Resources share price snapshot

The Carnaby Resources share price has been struggling in 2022.

It has slipped 10.8% year to date. Though, it’s still 483.3% higher than it was this time last year.

Motley Fool contributor Brooke Cooper 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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