What’s caused the Red Hill Iron (ASX:RHI) share price to plummet 37% today?

Here’s what’s weighing on the Red Hill Iron share price on Thursday…
The post What’s caused the Red Hill Iron (ASX:RHI) share price to plummet 37% today? appeared first on The Motley Fool Australia. –

Market watchers might be eying the Red Hill Iron Limited (ASX: RHI) share price’s significant tumble today.

However, it’s likely the company’s shareholders are starting to get excited.

Red Hill Iron’s notable dip coincides with the ex-dividend date for the company’s special dividend. Notably, the dividend is worth 22.6% of the stock’s previous closing price.

Additionally, the company released its non-price-sensitive annual report to the market last night.

At the time of writing, the Red Hill share price is $3.31. That’s 37.43% lower than it was at the end of yesterday’s session.

Let’s take a closer look at the latest news from the iron miner, as well as its special dividend.

Red Hill share price tumbles on Thursday

The Red Hill share price is plummeting as the company’s shareholders prepare to receive a fully franked $1.20 dividend.

Red Hill is handing back some of the initial $200 million it received from the sale of its 40% interest in the Red Hill Iron Ore Joint Venture to its shareholders.

The Red Hill Iron share price surged 269% when the company announced it was selling the asset to Mineral Resources Limited (ASX: MIN) in July.

Mineral Resources will pay Red Hill Iron another $200 million when the joint venture achieves its first production. It will also provide Red Hill with a 0.75% royalty on all future production at the joint venture and Mineral Resources’ Bungaroo South tenements. Finally, for the first 10 years, Mineral Resources will provide Red Hill Iron with royalties from 2 mining tenements nearby the joint venture.

Though, Red Hill Iron still holds the right to mine the joint venture tenements for gold and base metal assets.

Red Hill’s special dividend will be paid on 10 November to all who held the company’s stock when the ASX closed yesterday.

Finally, Red Hill Iron released its annual report last night. Within it, the company’s chair noted the company is still deciding if its Pannawanica Project is viable to mine.

It is also analysing drilling samples from its formerly owned joint venture to explore for gold and base metals.

The post What’s caused the Red Hill Iron (ASX:RHI) share price to plummet 37% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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