Copper and cash: Why this ASX mining share is on ice today

What did Cobre Limited announce this morning?

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A person wrapped in warm clothing with head, eyes and face covered by a hat, glasses and a scarf is coated in a layer of snow and ice. representing Strike Energy's trading halt today

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Key points

  • Cobre shares are frozen at 18 cents pending an announcement from the company
  • The trading halt is expected to be lifted on Friday following a capital raise announcement 
  • Earlier today, management advised the latest drilling results highlighted significant copper mineralisation at the Ngami Project

The Cobre Limited (ASX: CBE) share price won't be going anywhere on Wednesday.

This comes as the company requested its shares be placed in a trading halt.

The mineral explorer's shares are currently frozen at yesterday's closing price of 18 cents apiece.

Why is the Cobre share price halted?

At market open, Cobre requested trading of its shares be halted while it prepares to make an announcement.

According to its release, the company is planning to update the market with respect to a material capital raising.

Cobre has asked that the trading halt remains in place until Friday 5 August or following the release of the announcement, whichever comes first.

What does this mean?

While details remain unknown about the capital raise, it appears the company may be seeking to fund its ongoing drilling campaign.

In an earlier announcement today, Cobre provided its latest drilling results from the Ngami Copper Project (NCP) in Botswana.

The third diamond drill hole intersected a 15-metre zone of copper mineralisation consisting of chrysocolla, malachite, and fine-grained chalcocite.

While still in progress, Cobre initially planned to test the first of 57 ranked targets on Kalahari Metal Limited's NCP licenses.

However, proving the occurrence of a significant strike length of copper mineralisation highlights the potential of new discoveries.

The diamond drill rig will move to the next hole upon completion.

Cobre executive chair and managing director Martin Holland said:

The ongoing hole further illustrates the strike length of intersected copper mineralisation in this exciting target which remains open-ended. The footprint of mineralisation, which now extends over more than 3km, is very much in-line with known deposits in the Kalahari Copper Belt….

About the Cobre share price

Since this time last year, Cobre shares headed on a downhill trend before rocketing during the last week of July.

Ultimately, this led the company's shares to register a gain of 16% for the period, rocketing 592% in the past month alone.

Cobre has a market capitalisation of roughly $29 million with approximately 165 million shares outstanding.

Motley Fool contributor Aaron Teboneras 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 Scott Phillips.

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