Kasbah Resources: Up or Down?
With little direction from macroeconomic forces four years after a cyclical peak, many stocks within the resources sector have been responding to events with largely predictable trading patterns. Kasbah Resources is aiming to develop a tin mine in Morocco as it approaches the second anniversary of a price downtrend which has already stripped 75% from its value. The value loss has coincided with some slippage in its development timetable but, at the same time, there has been a resource expansion and a clearer definition of a project which is now ready for funding. For trend followers, the downside investment risks will understandably remain the most conspicuous influence. Debt funding packages were to be reviewed by the company during May as the last step in the choice of a project financier. Some moderate drift toward the upper part of the share price downtrend is consistent with a directional change that could accompany a finance breakthrough. It might still be better to wait but a critical point appears near.
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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