Trek Metals (ASX: TKM) shares are down 36% today. TKM shares are down because, well, that lithium find doesn’t have that much lithium in it. Which is something that does happen, it’s the very point of going exploring for minerals of course. But it’s also something of a disappointment when it does. The larger issue we’d draw attention to here is how there are two announcements today. Which is how corporate managements often do try to feed information to us. Something we should be aware of and be able to recognise.
The first announcement is about the lithium drilling: “Trek Metals Limited (ASX: TKM) (“Trek” or “the Company”) is pleased to advise that assay results from its maiden Reverse Circulation drill program at the 100%-owned Tambourah Lithium Project, located ~70km south-east of the world-class Pilgangoora lithium deposit in the Pilbara region of Western Australia, have confirmed the presence of fertile lithium-bearing pegmatites. “ OK, so they’ve got pegmatites, the right sort of rock, they’ve got spodumene, the right mineral in the rock, and they’ve got lithium in the spodumene. Which is where the problem is, there’s not much lithium. There are some 1.44%, 1,07% Li type values. But not many among their results. Rather more are 0.119, 0.149% and that sort of level. Not economic to exploit that is.
So, that’s a bit of a blow.
Trek Metals share price from Google Finance
There is the second announcement as well: “Trek Metals Limited (ASX: TKM) (“Trek” or the “Company”) is pleased to advise that it has further enhanced its Australian battery metals portfolio with the acquisition of a highly prospective niobium exploration project in the heart of the West Arunta Critical Minerals Province.“ Or, as we could put it. Well, that last one didn’t seem to go very well but this next one, WoW! It’s gonna be great!
It might seem a little cynical to put it that way but then we are indeed cynics where money and stock markets are involved. The correct question is always “Am I being cynical enough?” And here, the conjunction of the two announcements is just a little bit of news management to us. Entirely normal, usual even. But it is, still, soothing the hurt of the one announcement with the excitement of the next. Which is the point we think worth getting across here. Companies do manage the news flow so be aware of that and how they do it.
