Why is the Dreadnought share price struggling despite successful drill program

The price of base metals including zinc and iron ore fell overnight.

| More on:
a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

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

Key points

  • The Dreadnought share price is struggling today despite positive drilling results
  • The company advised of successful assay results at its Central Yilgarn Project in Western Australia
  • The zinc price fell 5% overnight, potentially impacting the company's share price

The Dreadnought Resources Ltd (ASX: DRE) share price is stalled today amid a drop in the price of base metals.

Dreadnought shares are currently trading at yesterday's closing price of 11.5 cents apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 1.09% at the time of writing.

Let's take a look at what's going on with the ASX mineral explorer share today.

What's going on?

Western Australian company Dreadnought is exploring multiple metals including zinc, iron, lead, silver, and gold.

A dramatic fall in the zinc price overnight may have impacted the Dreadnought share price. Zinc slumped 5.07% overnight to US$2,678.5 a tonne.

Base metal prices fell amid rising COVID-19 cases and weak manufacturing data from China, Reuters reported.

The iron ore price also dropped 2.38% overnight to US$82 a tonne, Trading Economics data shows.

Today, Dreadnought advised of successful assay results for drilling at the Central Yilgarn Project in Western Australia.

The company confirmed a fertile VMS base metals system at the Nelson copper, lead, zinc, and silver target. Results included:

  • 1m at 2.26% zinc, 2.27% lead, 53g/t silver and 0.1 g/t gold from 157m at drill hole NERC006

At Spitfire, Dreadnought discovered thick high-grade goethite-hematite iron ore. Results included:

  • 20m at 61.0% iron, 0.98% aluminum oxide., 2.99% silicon dioxide, 0.06% phosphorus, 8.2% LOI from 22m at drill hole SPRC001A

Management comment

Commenting on the news, managing director Dean Tuck said:

These results are a timely reminder of the potential at Central Yilgarn which represents a significant opportunity in an underexplored region.

We view Central Yilgarn as a valuable project in the portfolio with opportunity for commercialisation of a range of commodities and exploration success.

Share price snapshot

Despite today's stagnation, the Dreadnought share price has soared almost 200% in the past year, while it has gained 170% year to date.

In the past month, Dreadnought shares have climbed 13%.

Dreadnought has a market capitalisation of about $334 million based on the current share price.

Motley Fool contributor Monica O'Shea 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.

More on Materials Shares

A man looking at his laptop and thinking.
Materials Shares

What's happening with Lake Resources shares today?

Lake Resources is eyeing technology improvements to help cut costs.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Dividend Investing

How big will the BHP dividend be in 2025?

Let's see if the mining giant will be rewarding shareholders with more generous dividends.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

Fortescue share price falls after cost-cutting decision

The mining giant is cutting down its workforce materially to save money.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Materials Shares

Could BHP shares provide an 18% return for investors?

Let's see what Goldman Sachs is saying about this mining giant following its update.

Read more »

Two young risk-taking men pose for the camera as they jump off a cliff into the sea.
Materials Shares

How risky is buying ASX lithium shares right now?

Despite recent losses, this fund manager is holding onto these top ASX lithium stocks. Here’s why.

Read more »

A person wears a roaring lion mask.
Materials Shares

Who is buying 55,000 Liontown shares this week?

Lithium prices remain at multi-year lows, but this insider is putting $53,350 into the industry.

Read more »

Miner looking at a tablet.
Materials Shares

Core Lithium share price rockets 14% amid 'positive achievements'

Investors are sending the Core Lithium share price surging today. But why?

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Materials Shares

BHP share price on watch after record-breaking FY24 iron ore production

BHP's iron ore operations were on form during the fourth quarter and full year.

Read more »