Why Connemara Mining rocketed by 348%

Connemara Mining Company has been trading at no more than 1.25p since November, but a 12-line statement detailing the acquisition of five licences in Ireland - plus a quote from chairman, John Teeling - caused its share price to rocket by as much as 348% to 2.8p on Tuesday.

Covering 187 square km on the Innisowen peninsular in County Donegal, the licences include the former Glentogher lead silver mine. Connemara believes the area will contain high-grade gold mineralisation and reckons base metal deposits could also be found there.

Teeling said: "This move by Connemara furthers the aggressive stance we are taking in discovering Ireland's next gold deposit. It is worth noting that the new licence block is located within the Scottish-Irish Gold Belt along trend from the discovery by Dalradian Gold where they have recently announced an inferred gold resource of 3.5 million ounces."

In 2011, rock samples containing up to 104 grams per tonne of gold were discovered by the previous licence holders, although no high-grade outcrop was discovered at the time.

Connemara has identified 16 target areas in the licences and an initial prospecting programme will start in the next few days. Results are expected in July.

The miner holds 35 gold, zinc and lead exploration licences across Ireland, and was fully funded for the next two years after an oversubscribed £400,000 share placing at 2p back in September. In October, Connemara's broker talked up its low-cost exploration strategy, which involves farming out larger projects, and the fact that its projects are near existing discoveries and mines.

Although meteoric, Tuesday's gains go little way to recovering the value lost since listing on AIM at 35p in July 2007, just days before the financial crisis began officially.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.