The Global Lithium Resources Ltd (ASX: GL1) share price is heading south on Tuesday despite the company providing its latest drilling results.
Currently, the lithium explorer's share price is down 1.22% to $2.42 after spending the morning in positive territory.
At one point, the share price rose to as high as $2.54 before profit takers swooped in.
Let's take a closer look at what the Western Australia-based lithium company announced and why its shares are falling.
Image source: Getty Images
Global Lithium returns significant lithium assay results
In its release, Global Lithium announced that it has received the highest-ever grade of a lithium-bearing pegmatite from the Manna Lithium Project.
It is the first diamond core drilling program at the site which is located 100 kilometres east of Kalgoorlie in Western Australia.
Global Lithium highlighted the assay results:
- 5.7 metres @ 1.82% lithium oxide (Li2O) from 136.7 metres
- 3.9 metres @ 1.72% Li2O from 148.9 metres
- 6.8 metres @ 1.65% Li2O from 160.3 metres
- 6.8 metres @ 1.49% Li2O from 313.2 metres
In addition, a second reverse circulation (RC) rig has now commenced drilling at the Manna Lithium Project.
Once the drilling program and metallurgical test work is complete, Global Lithium will update the mineral resource estimate (MRE). This is expected to occur around the fourth quarter of 2022.
At present, the Manna Lithium Project hosts a maiden inferred mineral resource of 9.9Mt @ 1.14% Li2O.
Commenting on the results, Global Lithium general manager of exploration Stuart Peterson said:
It is very encouraging to see such high grade spodumene zones within the pegmatites at the Manna Lithium Project. This result shows that the spodumene crystal growth was complete during the pegmatites formation and having these clean, high grade spodumene intervals within the pegmatites should provide a clear metallurgical upgrade pathway to produce a saleable lithium concentrate.
So why is the Global Lithium share price tumbling?
Investors are selling down the Global Lithium share price today after surging more than 50% in the past week.
A key indicator, the relative strength index (RSI), touched 81 as sellers began to swing into action.
The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price. Normal levels range between 30 and 70, but anything outside this tells us if the share price is cheap or expensive.
Furthermore, the share price was drifting outside the Bollinger Bands. This works well in conjunction with the RSI, which signals if a share is oversold or overbought.
Despite today's decline, the Global Lithium share price has risen 160% in 2022, and is up an astonishing 525% over the past 12 months.
