The De Grey Mining Limited (ASX: DEG) share price has tanked more than 8% in Monday trading.
Shares in the mining company are deep in the red despite the company releasing promising drill results earlier this morning.
Let's take a closer look at what the company announced and why the De Gray share price might be falling.
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De Grey share price falls despite drilling extension
Earlier today, De Grey provided the market with encouraging results from its Eagle deposit at the company's Hemi Gold Discovery in Western Australia.
According to the update, the new results show the potential to increase its Hemi mineral resource estimate (MRE).
De Grey provided drilling results after extending the footprint of its Eagle deposit by 240 metres to the west of the MRE.
For section 28000E, De Grey reported 31 metres at 3.6 grams per tonne of gold from 241 metres. In addition, the company reported strike at 81 metres at 0.5 grams per tonne of gold from 51 metres.
At section 28160E, De Grey reported 33 metres at 1.8 grams per tonne of gold from 109 metres.
In addition, the company also reported significant results from depth and width extensions.
For section 28240E, the company reported strike at 121m at 1.1 grams per tonne at 146 metres and 21 metres at 1.7 grams per tonne at 4.4 metres.
De Grey's General Manager of Exploration Phil Tornatora commented:
"These new results at Eagle continue to demonstrate the potential for De Grey to rapidly and cost effectively grow the footprint and depth extent of the mineral resource at Hemi and follow the results announced for Diucon in July."
Foolish takeaway
The West Australian miner focuses on gold exploration and development activities. De Grey has 100% ownership of the Mallina Gold Project in the Pilbara region which is also the site of its flagship Hemi Gold Project.
Late last month, the miner also reported at Hemi.
De Grey noted that drilling will continue at its Eagle and Diucon deposits to increase the confidence level of the resource estimate.
Despite today's positive rhetoric, the De Gray share price has fallen hard in today's session.
At the time of writing, the De Grey share price is trading 6.7% lower for the day at $1.185. Shares in the gold miner were down more than 8% earlier, after hitting an intra-day low of $1.145.
Even though De Gray's share price is deep in the red today, shares in the mining company remain more than 16% higher for the year.
