Rincon Resources Ltd (ASX: RCR) shares have returned from a trading halt with a thud on Tuesday.
At one stage today, the ASX mining stock was down 35% to 5 cents.
The copper explorer's shares have recovered a touch since then but remain down 30% to 5.4 cents at the time of writing.
Why is this ASX mining stock crashing?
Investors have been hitting the sell button in a panic today after the company released disappointing results from the drilling program at the Pokali IOCG [iron oxide copper-gold] Prospect located at its West Arunta Project in Western Australia.
According to the release, the results of the first pass drilling program have continued to demonstrate widespread anomalous copper mineralisation, which extends over 4km across the known outcropping system.
The drilling program comprised two diamond drill holes and 12 reverse circulation holes, targeting both deep and shallow areas across the Pokali Prospect area.
Management advised that elevated copper mineralisation tended to occur over narrower widths, ranging from 1m to 10m, and appeared to be predominantly associated with late structures and demagnetised zones.
It notes that multi-element geochemical analysis has established zoned alteration and trace element signatures at Pokali East and Pokali North that are indicative of IOCG systems.
And while these results are not necessarily terrible, they fall well short of the lofty expectations that investors had.
For example, an announcement in May saw the ASX mining stock's managing director, Gary Harvey, excitedly state:
This second deep diamond hole was aimed at testing geophysical anomalism and the geological host rocks and mineral potential in the main Pokali gravity and magnetic anomaly trend. For me to witness core recovered at site containing copper related veining was special. Visual inspection of the drill core confirm that Pokali has potential to host a significant IOCG deposit.
'Not to be'
This morning, Harvey was a lot less upbeat after receiving the assays results from Pokali. He said:
This was our first drilling program at Pokali, and we hoped to intersect high-grade copper mineralisation. Unfortunately, this was not to be however, the analysis of the multi-element data has provided very positive outcomes in furthering our hunt for a copper discovery.
Establishing alteration signatures indicative of the type of the zoning one expects to observe in an extensive IOCG system is additional evidence to warrant further work at Pokali. We can now map these in detail to vector towards the heart of the IOCG system, where high-grade copper mineralisation is likely to be found.
