It certainly has been a mixed day for the Avz Minerals Ltd (ASX: AVZ) share price.
After peaking at an all-time high of 24 cents in early trade, the lithium-focused mineral exploration company's shares finished the day down 11% at 20 cents.
What happened?
This morning the company advised that it has signed up Equity Drilling Limited for the completion of an initial 20,000 metres of drilling at the Manono Lithium Project in the Democratic Republic of the Congo.
According to the release, the contract covers the initial 20,000 metre phase of a planned 40,000 metre drill program that over a three-month period from December will test, define, and report on the mineral resources at the Kitotolo and Manono sectors of the project.
Earlier drilling results at the project have revealed a potential world-class lithium asset, so the sooner a mineral resource can be defined, the easier it will become to value the company.
So why are its shares lower today?
I suspect that today's decline is the result of profit taking and nothing more.
With the drilling program not expected to commence until December, I expect that traders believe there is limited news on the horizon that will drive the share price any higher.
And considering its shares are up a whopping 330% in just the last three months, I think it is reasonable to expect traders to lock in their gains.
While I do think that Avz Minerals has the potential to be a force in the lithium industry alongside Galaxy Resources Limited (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS), I would hold off an investment until the mineral resource is defined.
