Impact Minerals’ History Stymies Quality Appeal
Attempting to break from their historical price patterns is a daunting task near the bottom of a cycle for many early stage mining companies. Sometimes, even modest changes in their absolute dollar values can represent very strong percentage share price gains that encourage investors to sell. Impact Minerals, led by an experienced explorer and occupying highly prospective ground in NSW, is an example of a company battling to break out of this bottom of the cycle market trap. The most recent share price rise from 2.4 cents to 2.9 cents is already a 21% gain but only a $3.9 million value increment. Some of this rise will have been due to anticipation of favourable results due in June from a current drill program. Now, a critical trading judgment is needed. Will a 20-30% price gain once again attract market selling or will the multi-million dollar value created by the ongoing exploration effort overcome the historical market barriers leading to a sustainably higher share price? The quality is there but the cyclical pressures may remain too strong.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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