El Nino Ventures Inc. (CVE:ELN) (PINK:ELNOF) update on drilling program pushed their share price higher in the recent days, but traders still remain cautious.
ELN went up 22% this week. This would be nothing special as it falls within the range of the stock’s general volatility, but the move was complimented by large trading volume. Staggering volume of over 3.3 million was far above the average of 321 thousand during Tuesday’s trading session.Â
The effect was caused by a drilling update. On August 30, 2011 the company published drilling results from Murray Brook deposit. The report stated they have found significant amounts of zinc, lead, gold and silver.
Top results show up to 1 g/t gold and 69.86 g/t silver over 36 meters accompanied by 4.65% zinc and 1.9% lead mineralization. 15 holes were done under Phase I drilling program which totaled slightly over 3 thousand meters. El Nino will now be moving onto Phase II program to drill another 6.6 thousand meters.
The report states there are good chances of further increasing the grades found as the deposit remains open.
Traders’ reaction to the news was only a single day price rally which pushed the market cap to $6.5 million. This is 2.5 times the net tangible worth $2.4 million, which is rather common for exploration stage company and should be taken into account when expecting further price movements.
