Here's why the Essential Metals (ASX:ESS) share price is leaping 16% today

The company's stock is soaring on the back of its quarterly report.

| More on:
One female and two male construction workers laugh on site.

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

Key points

  • The Essential Metals share price is up 16% this afternoon, trading at 47 cents
  • The gain follows the release of the company's quarterly report
  • Within the report, the company outlined its exploration activities and strong cash position

The Essential Metals Ltd (ASX: ESS) share price is surging on Friday after the company released its activities and cash flow report for the December quarter.

At the time of writing, shares in Essential Metals are swapping hands for 47 cents. That represents a 16.05% gain on the company's previous close.

Essential Metals share price gains on strong financial position

  • Last quarter, the company received assay results from the Dome North project
  • It also began another drilling campaign at Dome North
  • It had $9 million cash on hand at the end of the quarter
  • Finally, it worked to divest a Canadian asset

Over the quarter just been, Essential Metals received assay results from a 5,934m reverse circulation drill program completed at the Dome North lithium project in Western Australia earlier last year, with the best results found at the Cade Deposit.

Additionally, another 13-hole diamond drill program began at the project in December.

Finally, the company completed a baseline environmental survey – part of its activities to prepare Dome North for development.

Also over the quarter, Essential Metals received $400,000 from Australian Nickel Company as a milestone payment in accordance with the Blair–Golden Ridge Nickel Farm-in/Joint Venture.

As of 31 December, the company had $8.99 million of cash in the bank and no debt. That's enough to fund it for another 12 quarters of similar activities.

What else happened during the quarter?

The company also worked to sell its 51% interest in Canada's Mavis Lake lithium project last quarter.

The asset was sold to Critical Resources Ltd (ASX: CRR). Though, the sale wasn't finalised until after the quarter's end.

It saw Essential Metals walk away with $750,000 in cash – 50% withheld for Canadian tax purposes – and 34 million Critical Resources shares calculated at 2.2 cents each.

Right now, the Critical Resources share price is around 10 cents.

The Essential Metals share price gained 8% after the company announced the divestment in mid-October.

What's next?

The company is currently continuing the 13-hole diamond drill program at Dome North. That's expected to be completed in mid-February.

Additionally, it recently began a 30-hole air-core drilling program to follow up on anomalism from the previous program at Dome North.

Essential Metals share price snapshot

This year has been particularly good to the Essential Metals share price.

It has gained a whopping 135% since the final close of 2021. It is also 176% higher than it was this time last year.

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

More on Earnings Results

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
Earnings Results

Guess which ASX 200 stock crashed 8% on first-half profit decline and dividend cut

It has been a tough six months for this fried chicken seller.

Read more »

Business people discussing project on digital tablet.
Earnings Results

Results in! This ASX 200 stock is rising despite falling half-year profits and dividend cut

Let's see how the company performed during the six months.

Read more »

A man sitting at a computer is blown away by what he's seeing on the screen, hair and tie whooshing back as he screams argh in panic.
Earnings Results

This ASX small-cap stock is up 500% in 2024. Here's why it just crashed

What is disappointing investors today? Let's find out why they are selling this stock.

Read more »

A woman with bright yellow hair wearing a brightly patterned blouse reacts to big news that she's reading on her phone.
Earnings Results

Guess which ASX 100 share is sinking despite record results

This healthcare stock had a record half. Here's what drove its growth.

Read more »

A smiling woman looks at her phone as she walks with her suitcase inside an airport.
Earnings Results

Web Travel share price jumps 14% on half year results

Here's what this travel technology company reported this morning.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Earnings Results

Why is this ASX tech stock surging 24% to a record high today?

Shareholders of this tech stock will be celebrating today after it hit a record high.

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.
Travel Shares

Guess which ASX 200 stock is falling amid 'challenging' outlook

Trading conditions aren't easy for this online travel agent right now.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

Up 74% in 2024, why is this ASX 200 stock rallying today?

Recurring revenues continue to grow.

Read more »