ASX small-cap stock explodes 210% on new copper find

This small cap has tripled in value in a single day. But why?

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Terra Metals Ltd (ASX: TM1) shares are having an incredibly positive session on Thursday.

At one stage today, the copper explorer's shares were up 210% to a new high of 9.6 cents.

The ASX small-cap stock has pulled back a touch since then but remains up 171% to 8.4 cents at the time of writing.

Why is this ASX small-cap stock exploding?

Investors have responded very positively to the announcement of new drilling results from the Dante Project in the West Musgrave region of Western Australia.

According to the release, a further 14 wide-spaced, first-pass reconnaissance drill holes at the Dante Reefs has confirmed the discovery of multiple Platreef-style copper-PGE sulphide reefs.

Management notes that the mineralisation has been defined over 4.5km so far across Reef 1 and Reef 2. However, it remains open along strike and downdip. There are assays pending from a further 16 drillholes covering an additional 4.5km of strike at Reef 2.

The company believes the drilling results to-date confirm that the Dante Reefs have the potential to host a large sulphide deposit containing copper, gold, PGEs, vanadium and titanium.

'First of its kind in Australia'

The ASX small-cap stock's managing director and CEO, Thomas Line, was excited with the results. He notes that this is the first of its kind in Australia. Line said:

We are excited to have discovered multiple Platreef-style copper-PGE sulphide reefs from a first pass-reconnaissance drilling program at the Dante Project; the first of its kind in Australia. Our next step is to continue to replicate these results over the extensive strike at the Dante Reefs, ensuring we are well positioned for success.

It's clear that there is a concentration and combination of high value metals within the same layers in the Dante Reefs. Chalcocite and bornite appear to be the dominant copper-sulphides. Our highly experienced metallurgical team, led by Dr. Evan Kirby, have already commenced initial metallurgical test work, focusing on the application of conventional flowsheets.

Line also notes that there is still a lot of drilling to come, which could mean even stronger results are coming in the future. He said:

This is just the beginning of the discovery story at the Dante Project, where the vast majority of targets and strike remain undrilled. New insights at the Cronus Prospect are highlighting possible vectors for higher-grade magmatic sulphides. We look forward to presenting these along with further assays in the coming weeks.

Motley Fool contributor James Mickleboro 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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