This is a little late, but I must say I did not expect an issue by A1 Minerals. I did not monitor their cash position or broader financial context. Good luck trying to get that information in the context of the current disclosure regulations - minimum standards become maximum standards. The best time to buy mining stocks is during the recessions. Mining executives lacking validation love to talk, to hear how great their mining projects are. In a bull or strong metal market, money is easier, and they have no problems dispensing with all but mining disclosure.
Anyway, A1 Minerals (ASX.AAM) collapsed to 15c in the last two days, so I bought back into this stock at 15.5c, having sold at 20.5-22.5c. Now 16.5c. I have decided to trade this stock in future because this stock is performing worse than gold is compensating. It therefore only makes sense as a short term trade to me. I guess it was never more than a medium trade anyway... until MGK demonstrates its potential. I am not aware of whether there is an underwriter who is destined to support the stock, however I argue that:
1. Gold price is about to have another rally - particularly in AUD terms
2. The new issue is priced at 18c, so the company will want a price of 20-22c to give shareholders confidence in taking up the issue.
3. Technically, 15c is a strong support, and the chart also suggests a rally to 22c (max), thereafter I expect a pull-back to 20c support, before moving higher...subject to a rebuilding of confidence.
That is about as much as I can predict with a company which discloses little and is always prone to surprise on the negative side....just like our 'arbitrary' government. This stock has to overcome a huge wall of doubt in my mind....as for government...they have no hope. Flawed fundamentally.
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Andrew Sheldon www.sheldonthinks.com
Anyway, A1 Minerals (ASX.AAM) collapsed to 15c in the last two days, so I bought back into this stock at 15.5c, having sold at 20.5-22.5c. Now 16.5c. I have decided to trade this stock in future because this stock is performing worse than gold is compensating. It therefore only makes sense as a short term trade to me. I guess it was never more than a medium trade anyway... until MGK demonstrates its potential. I am not aware of whether there is an underwriter who is destined to support the stock, however I argue that:
1. Gold price is about to have another rally - particularly in AUD terms
2. The new issue is priced at 18c, so the company will want a price of 20-22c to give shareholders confidence in taking up the issue.
3. Technically, 15c is a strong support, and the chart also suggests a rally to 22c (max), thereafter I expect a pull-back to 20c support, before moving higher...subject to a rebuilding of confidence.
That is about as much as I can predict with a company which discloses little and is always prone to surprise on the negative side....just like our 'arbitrary' government. This stock has to overcome a huge wall of doubt in my mind....as for government...they have no hope. Flawed fundamentally.
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Andrew Sheldon www.sheldonthinks.com
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