Rockfire Resources (LON: ROCK) shares are running flat this morning after the company released an exploration update. We’d normally hope for at least some movement, one way or the other, on such an information release. After all, this is new information, it’s new news that moves share prices, so why hasn’t the price moved?
The answer being that there’s not all that much new news in that information update on the exploration programme. This isn’t because Rockfire is boring or anything, or even that they’ve not been doing anything. It’s just that there’s no breakout information – in either direction – in the update.
For example, in Australia, the news is that they’ve collected soil samples from four sites. OK, interesting, but that’s obviously very, very early-stage exploration. Further, we don’t know the results of those samples as yet. Similarly, there’s the agreement on site access with a landowner in Queensland. Important, yes, you can’t mine what you can’t get to. But also not one of these things that we expect not to happen – so it’s not a surprise that it has.
The other news concerns the Molaoi Zinc deposit in Greece. This is again an interesting project. As we know, exploration and extraction technologies march on over time. So, deposits that were previously thought to be mined out, or not economic, can become so given the better and newer technologies available now. That means that a useful method of exploration is to go back over deposits known about before, but not exploited in the past. Which is what is being done at Molaoi.
As we’ve said before about Rockfire Resources this could come good, zinc is a metal where supply is expected to fade in the middle future so a new mine would meet demand.
But on the other hand, the effect on the Rockfire share price right now of this new information is likely to be limited. For we had an update back on March 8 when the news that Rockfire had won the bid for the site was announced. There are indeed business sectors where a month is the long term – banks have been known to go entirely bust in less time than that for example – but mining isn’t one of them. The announcement today is that the old core (ie, what was drilled at some past date) has been located, and analysis is starting. That environmental consultants are being, umm, consulted so that new drilling plans can be prepared and so on. Essentially, all the sort of housekeeping of checking past evidence and preparing to gather new is ongoing.
This is all necessary activity, but it’s not of the level of excitement to get the juices stirring – nor the Rockfire share price motoring. Which is why there is that very little movement in that Rockfire Resources share price.
As ever, we require new news to change a share price – all the things we already know are already in that price.
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Tim Worstall is a freelance writer specialising in economics and the financial markets.