The share price of small-cap gold explorer Firefly Resources Ltd [ASX:FFR] has soared over the past couple of days, though there has been no news to note from the company.
The last significant update we received from FFR was at the beginning of the month when it announced a successful capital raise of $6 million to fund accelerated exploration.
On Wednesday, the FFR share price spiked heavily, jumping 47% to set a new 52-week high.
A move that warranted an explanation from FFR itself, though the gold explorer said it was not aware of information that would explain the share price action.
Today, the FFR share price has continued its upward momentum.
At the time of writing, FFR is up 4.44% to trade at 23.5 cents per share.
Is this the result of anticipation of FOMO?
If you’re not familiar with what FFR is working with, let me give you the short version.
In a recent drilling update, FFR demonstrated some pretty significant mineralisation at its Yalgoo project in the Murchison region of Western Australia.
Highlights from the latest round of drilling include:
- 48 metres at 1.71 grams of gold per tonne (g/t) from 33 metres, including six metres at 5.28 g/t from 35 metres, and nine metres at 2.4 g/t from 70 metres
- Four metres at 3.63 g/t from 38 metres, including one metre at 11.3 g/t from 38 metres
These complemented previous standout results of six metres at 244.9 g/t from 50 metres, including one metre at 1,439.55 g/t from 51 metres.
But why exactly the share price rose so sharply on Wednesday is debatable.
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Having recently received $6 million to accelerate exploration at Yalgoo, FFR said we can expect news from the project in the coming months.
Though this doesn’t explain the recent share price action.
Have a look through tweets from Wednesday and you’ll find an explosion of interest in the FFR share price.
But it is difficult to say whether the interest was a result of the share price action or the cause.
A bit of chicken and the egg, I’m afraid.
Is Firefly Resources overhyped?
FFR’s recent capital raise hints at the confidence professional investors have in the small explorer.
FFR said we can expect a maiden resource estimate by year’s end, so we could see the share price climb in anticipation.
Also, with Australia gearing up to surpass China as the undisputed global leader in gold exploration, mining and production, there could be macro-economic factors playing into FFR’s favour.
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For The Daily Reckoning Australia