Here's why the Caspin Resources (ASX:CPN) share price is crashing 18% today

An drilling update yesterday appears to have spooked investors in today's session.

| More on:
Upset man in hard hat puts hand over face after Armada Metals share price sinks

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Caspin Resources Ltd (ASX: CPN) shares started the day's trading horrendously with 18% scalped from their previous close since the market opened.

The mineral explorer's shares are on the move despite there being no market-sensitive information for the company today.

However, previous updates released over the past few days may help explain the price action in Wednesday's session.

Let's take a closer look.

Why is the Caspin Resources share price plummeting today?

There's nothing remarkable coming out of the company's camp today that could directly explain the dramatic movements in its share price.

However, Caspin released a note yesterday that explained it had obtained the first results from its reverse circulation (RC) drilling program at its Yarawindah Brook PGE-Nickel-Cobalt project in WA.

The update was made by the board "out of an abundance of caution" in response to an ASX-penned letter inquiring about Caspin's share price movement on 14 October.

Due to the nature of the ASX's investigative letter, which does not imply any wrongdoing from Caspin, the company decided to provide an update regarding its RC drilling program results at Yarawindah Brook to clear the air and ensure no stones were left unturned.

The update notes that drill results came from the first 3 holes while assays from the remaining 8 holes are still pending. The company said further and more detailed analytical interpretation is required on all 11 sets of results.

Caspin also advises that it "will require additional drill results…to complete a thorough interpretation of these [11 holes] drill results".

Consequently, the company also advised that investors should keep that in mind when examining the exploration results it announced yesterday.

With this context, Caspin explained the first 3 drill holes were "originally designed to test what was originally interpreted to be the prospective eastern margin of the [mineral] intrusion".

It also explained that RC drilling will recommence this month at Yarawindah after being temporarily paused due to soggy ground conditions that reduced access to some sections of the project.

Caspin also explained there is no way of knowing when the assay laboratory will be finished with its interpretations.

In light of this, investors appear to be spooked and are exiting their positions at a rapid pace, hence, the drop in the Caspin Resources share price today.

At last check, shares in the minerals' exploration company were trading at 86.5 cents, a significant fall from the previous close of $1.06.

Caspin Resources share price snapshot

The Caspin Resources share price has enjoyed bathing in a pool of green this year to date, having posted a return of 63% since January 1.

This extends its gain over the last 12 months to 92%, well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)'s climb of about 19% during the same time.

The author Zach Bristow has no positions 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 Bruce Jackson.

More on Share Fallers

A woman with short brown hair and wearing a yellow top looks at the camera with a puzzled and shocked look on her face as the Westpac share price goes down for no reason today
Share Fallers

Why Clearview, NAB, Resolute Mining, and Westpac shares are dropping today

These shares are under pressure today. But why?

Read more »

A man looking at his laptop and thinking.
Bank Shares

Why is the Bendigo Bank share price tanking today?

There are a few things that could be driving this bank lower today.

Read more »

Three guys in shirts and ties give the thumbs down.
Share Fallers

Why Bellevue, Domain, Skycity, and Wildcat shares are tumbling today

These shares are having a tough time on hump day. But why?

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

Why Domino's, Lynas, Paladin Energy, and St Barbara shares are sinking today

These shares are having a tough session. What's going on?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Amcor, Boss Energy, Brickworks, and Mineral Resources shares are tumbling today

These shares are starting the week in the red. But why?

Read more »

Person with thumbs down and a red sad face poster covering the face.
Share Fallers

The worst 3 ASX 200 stocks to buy and hold in October unmasked

You would have done well to avoid these three ASX 200 stocks in October.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why AFT, Amcor, Corporate Travel, and Macquarie shares are falling today

These shares are ending the week in the red. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why AGL, Imugene, Star, and Woolworths shares are dropping today

These shares are dropping on Thursday. Let's see why investors are selling them.

Read more »