The market reacted strongly to Red Mountain Mining’s (ASX: RMX) recent cobalt and copper assay results from a sampling program at its flagship Mukabe-Kasari project in the Democratic Republic of Congo, with the company’s share price plunging more than 60% by late morning trade as investors deserted the stock.
Red Mountain published the results from 657 soil and rock chip samples taken across three project areas with the highest cobalt sample grading 0.0117% and the majority sitting under 0.005%.
Copper assays didn’t fare much better with the highest sample grading 0.081% and numerous others returning less than 0.0505%.
Red Mountain claimed scout drilling at the project had failed to return economically viable cobalt grades to sustain a profitable cobalt operation.
Despite the uneconomical assay results, Red Mountain maintains it has identified a new copper anomaly along 12km of strike and over three zones of the 130-square kilometre Mukabe-Kasari project.
According to Red Mountain, the copper anomalies support the potential for a in-situ copper mineralisation, as well the multiple copper mineralisation horizons across the project.
The company’s next step will be to plan a drilling campaign to explore the thickness and spacing of the mineralised horizons.
However, Red Mountain cautioned the drill program would take into account the project’s overall and other opportunities that become available to the company.
Mukabe-Kasari is situated in a region renowned for its cobalt prospectivity and lies about 70km of one the world’s largest copper and cobalt mines Tenke Fungerume.
Tenke Fungerume hosts one of largest copper and cobalt resources in the world and the largest in the DRC.
Red Mountain stated it was actively seeking new opportunities in new energy and precious metals including cobalt, zinc, lithium and gold.
By mid-day the initial investor desertion had eased up with the company’s share price down 58% to A$0.013 at the time of writing.