How is this ASX gold stock rocketing 16% on Monday amid a tanking gold price?

ASX gold stock Waratah Minerals Ltd (ASX: WTM) is bucking the broader sell-off today and storming higher.

Waratah Minerals share closed on Friday trading for 55 cents. In late morning trade on Monday, shares are changing hands for 63.5 cents apiece, up 15.5%.

For some context, the All Ordinaries Index (ASX: XAO) is down 0.4% today, while the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down a steep 6.6%.

Unlike Waratah Minerals, most ASX gold stocks are deep in the red today following another sharp decline in the gold price. Gold is currently trading for US$4,759 per ounce. This now sees the yellow metal down more than 22% since Thursday's US$5,417 per ounce, according to data from Bloomberg.

Gold came under pressure at the end of last week following news that United States President Donald Trump appointed Kevin Warsh to succeed Jerome Powell as Federal Reserve chair.

Warsh is widely expected to focus on combating inflation, which has the market pricing in higher US interest rates. Higher interest rates in the world's top economy are likely to hinder gold's remarkable bull run, as bullion doesn't pay any interest itself and is priced in US dollars.

Now, here's why a tumbling gold price isn't keeping investors from bidding up Waratah Minerals shares today.

ASX gold stock leaps on strong drill results

Waratah shares are surging today after the company announced a promising batch of new results from the ongoing drill program at its 100%-owned Spur Gold Project, located in New South Wales.

The ASX gold stock reported that complete assay results for five diamond drill holes and partial results from one diamond drill hole (SPD015) have returned "significant intercepts" of gold mineralisation from the Spur and Consols Zones.

SPD021 is likely spurring added interest from investors, with the hole returning the highest-grade interval yet achieved at the site. Top results included 6 metres at 24.56 grams of gold per tonne from 329 metres, including 1m at 146 g/t Au from 333m and 9m at 5.52 g/t Au from 142m.

The miner noted that drilling at Consols continues to demonstrate the increased scale and grade of the mineralised system.

Waratah Minerals currently has seven drill rigs operating at the project, with two at the Spur Zone and five said to be focused on extending the wide and high-grade intercepts at the newly discovered Consols Zone.

What did management say?

Commenting on the results sending the ASX gold stock surging today, Waratah managing director Peter Duerden said, "The partial results from SPD015 are significant and exciting as they indicate one of the many high-grade shoots at Consols potentially extending to surface."

Duerden added:

Results from Spur indicate the potential for extensions at the eastern margin of the system whilst continuing to provide internal definition of high-grade trends including the intercept of 1m at 146 g/t Au in hole SPD021, representing the highest-grade assay recorded to date…

These outstanding results support Waratahs' interpretation that the gold mineralisation at Spur has the potential to be a significant gold system with similarities to other very strongly mineralised gold deposits globally.

Waratah Minerals share price snapshot

With today's intraday gains factored in, shares in the ASX gold stock are now up a whopping 339.3% in 12 months.

The post How is this ASX gold stock rocketing 16% on Monday amid a tanking gold price? appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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