The Carnaby Resources Ltd (ASX: CNB) share price was through the roof today. By close of trade, shares in the mineral exploration company were trading for 30 cents each – up 11.11%.
The significant price rise came after the company announced it detected "strong" induced polarisation (IP) signals at its gold mine in Queensland.
Let's take a closer look at the announcement.
Image source: Getty Images
What boosted the Carnaby share price?
In a statement to the ASX, Carnaby Resources said 4 "strong IP conductors…have been generated at the Nil Desperandum Prospect [in Mt Isa, Queensland] …" The company says the results mean it now has immediate walk-up targets for drilling.
IP is a method to locate deposits of ore, including gold and copper, in surfaces without the need to first dig into the ground.
After today's result, the company said it would bring forward drilling in the area to next week. It also said it conducted further IP tests at its Mount Birnie and Duchess Prospects. These will be announced "shortly", according to the statement.
Investors are have been buoyed by today's results, judging by the Carnaby share price action.
Management commentary
Carnaby managing director Rob Watkins said of today's news:
Nil Desperandum and our other Greater Duchess Copper Gold prospect areas are rapidly emerging as an exceptional camp of high-grade copper gold targets…
He added:
We are genuinely excited about the targets and as such we have bought forward the 4,000m RC drilling program which will now commence next week.
Copper and gold commodity prices
Historical finds at the prospect have mostly been copper and gold. Both gold and copper have seen their prices rise over the past month – copper much more so. The reddish-brown metal is up 14% over the month and 32.8% since the beginning of the year to US$4.67 per pound. Gold, meanwhile, is only 3.5% higher in a month and down 4.14% in 2021. It is trading for US$1,817.83 per troy ounce.
Surging demand for clean technologies has been fuelling the demand for copper. Some have even been speculating that the copper price may be in a bubble.
According to the website Trading Economics, lower US Treasury yields, and a weaker US dollar are both pumping the current price of gold. It also cited the metal's safe-haven appeal to investors, as some worry about rising coronavirus case numbers in Japan and India.
Carnaby Resources share price snapshot
Over the past 12 months, the Carnaby Resources share price has increased by around 440%. Only 2 days ago, the company had another double-digit growth day when it announced another gold discovery.
In the last half-year, however, the company's value has decreased by 19.2%.
Carnaby Resources has a market capitalisation of $46.5 million.
