ASX lithium share Red Dirt Metals Ltd (ASX: RDT) is showing investors the money, catapulting 24.3% in just five days while the rest of the market hovers around break-even.
By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) has risen by 1.8% over the past five days.
Let's dig a little deeper into why Red Dirt Metals shares are on fire this week.
Image source: Getty Images
What news has this ASX lithium share skyrocketing?
Red Dirt Metals made two price-sensitive announcements this week, and clearly, investors are impressed.
The first one was released yesterday and documented encouraging drilling results at the Mt Ida Lithium Project, which is located in the Eastern Goldfields region of Western Australia.
Red Dirt Metals has got five drill rigs undertaking resource infill and extension drilling to expand and upgrade the initial global resource estimate of 12.7Mt @ 1.2% Li2O.
Additional testing of exploration targets is ongoing over a large prospective area of 170 sq km.
Over January and February, 27 holes and 4,392 metres were drilled, revealing "excellent drilling intercepts starting at 30 metres below surface and extending to deeper levels", the company said.
The new drilling intercepts included:
- 44.5m @ 1.2% Li2O from 357.3m
- 34.9 @ 1.3% Li2O from 398.3m
- 27.2m @ 1.2% Li2O from 430.4m
- 14.1m @ 1.2% Li2O from 93.9m
- 11.7m @ 1.3% Li2O from 75.3m.
The company said the results demonstrated "the calibre of the Mt Ida Lithium Project".
Red Dirt Metals executive chair David Flanagan commented:
It is all about speed to market. We have a granted mining lease with a long and recent history of mining … 5 rigs in the field, thousands of samples in the lab and targeting approval to start mining this year.
The outlook for lithium is fantastic and with so many high grade and wide drill intercepts we see strong prospects for material resource extensions.
This news prompted a 5% bump for the ASX lithium share yesterday to 42 cents at the market close.
What did Red Dirt Metals reveal today?
Red Dirt Metals released its second announcement for the week today. This one relates to its Yinnetharra Lithium Project in the Gascoyne region of Western Australia.
The project is a whopper in land size, spanning 575 sq km.
The company said new assay results from the project's Malinda Prospect showed "multiple thick lithium mineralised intercepts" from the surface to a depth of 350 metres.
The Malinda Prospect has 50 mapped pegmatites. Recent drilling of some of them found:
- 29m @ 1.39% Li2O from 121 meters
- 21m @ 1.13% Li2O from 71 metres
- 17m @ 1.06% Li2O from 52 metres
- 12m @ 1.38% Li2O from 155 metres.
Red Dirt Metals said this particular prospect was "very large and remains relatively untested".
Flanagan quipped that Yinnetharra was starting to look "more like a province than a project".
He said:
This project just keeps on producing brilliant hits.
It's hard to believe these results are from first pass drilling at a project we acquired in September in a region already producing 55% of the world's annual lithium demands.
Red Dirt has drilled 101 holes for 21,150 metres at Yinnetharra. It is assaying a further 77 holes now, with results due over the coming months. The company is on track to complete 230 more holes by September.
Today's announcement saw the ASX lithium share rise a further 4.2% to 43.25 cents at the close.
Red Dirt Metals share price snapshot
This ASX lithium share has fallen 27% over the past year but is up 210% over the past two years.
Red Dirt Metals is a nano-cap lithium share with a market capitalisation of $193.5 million.
