Wildcat Resources (ASX: WC8) shares are up 79%. WC8 shares have leapt - again - on confirmation of the lithium content at Tabba Tabba. Given that WC8 shares are up 1,300% and more so far this year this is obviously a darn good piece of exploration work. Yet it’s also still true that Wildcat Resources shares are below their most recent peak - yes, even after today’s rise. Which is a good little indication that exploration mining shares can rather get ahead of themselves when people get excited.
The announcement: “First assays from Wildcat’s maiden drilling at Tabba Tabba, WA, confirm high-grade lithium mineralisation from surface in northern and central pegmatite clusters, demonstrating potential for a large-scale lithium camp. Best results from the central cluster: 85m at 1.1% Li2O from surface (TARC086) (down-hole length) including 59m @ 1.5% Li2O from surface 218m at 0.8% Li2O from 16m (TARC089) (down-hole length)
including 22m at 1.0% Li2O from 31m including 23m at 1.0% Li2O from 152m including 51m at 1.5% Li2O from 183m to end of hole”
Worth noting that yes, those are interesting results but they’re not, not as yet, conclusive about the economic value of the find. As Wildcat say, “demonstrating potential”.
Wildcat Resources share price from Google Finance
We looked at Wildcat back in May, when the drilling first started. Then at WC8 again in August. Our most recent look at Wildcat Resources was a couple of weeks back. When we said: “Wildcat Resources (ASX: WC8) was down 17% today. WC8 shares are also well down off their recent peak - as we said was likely to happen. Wildcat has something, something potentially of value. So, the current value is the future value of it being true times the probability of it being true. The “true” here being an economic deposit of lithium at Tabba Tabba.There’s no specific news driving this share price movement, not from or concerning the company at least. The issue is, we think, a combination of hope and news about the wider lithium market.”
Each new stage and announcement has been met with a soaring share price. As it probably should be given that they gain more and more evidence about the potential of Tabba Tabba. But it’s also true that each soar has been followed by a gentle decline in the share price again. Quite possibly on the basis that people get too excited by each information release and then rethink in the following days. It’s worth noting that Wildcat shares are, even after today’s rise, still below their most recent highs. It wouldn’t surprise us to see this share price leap fade away in time.