Shares in CuDeco Ltd - the company formerly known as Australian Mining Investments - plunged more than 55 per cent following an update on the mining explorer's Rocklands copper project, sparking another legal investigation.
CuDeco shares closed 50 per cent down today at $3.56, after plunging to $2.50 when the latest report roughly halved the inferred resource at Rocklands.
Law firm Slater and Gordon has announced that it will be 'strenuously investigating' the matter.
"Companies have a duty not to mislead their shareholders and the public and they also have a legal obligation to keep the market properly informed," said Slater and Gordon partner Lisa Nichols.
"That includes continuously disclosing price sensitive information and also making sure that the information disclosed is accurate...We're now looking at whether those earlier statements by the company were justified in light of the information released today."
CuDeco estimated that the inferred resource at Rocklands came to 25 million tonnes, down from the 59 million tonnes flagged in a preceding report issued on June 29.
However, the company said it is commencing further drilling within the next six weeks which it believes will again bulk up the inferred resource.
Fat Prophets senior resources analyst Gavin Wendt said the market reaction to CuDeco - whose shares began trading again today after a 12 day break - reflected renewed investor caution.
"There was obviously a lot of hype surrounding the stock surrounding the suspension," he said.
"Often when the ASX queries companies it has a dampening on the sentiment around a company."
CuDeco went into a trading halt on July 5 and was suspended from trading a day later, following a share price spike spurred by speculation about Rocklands' potential following the June 29 report.
The stock had soared from a closing price of $1.78 on June 28 to an intraday high of $10.00 on July 5, before easing slightly to $7.11.
The stock was worth less than 40 cents at the start of June.
However, concerns that the June update did not provide sufficient information to allow an accurate assessment of the project's potential prompted both the Australian Stock Exchange and the Australian Securities and Investments Commission to launch investigations into the company.
