With the gold price heading upwards with the slowdown in the global economy this is only good for Gold explorers and producers. Also the CEO who is running the company just bought over £20,000 in shares, says it all imo.
You think aim works like that? The only people buying in now are the ones looking at 5 years+? I can tell you I was in UKOG before the herd arrived after Kimmeridge results which is mostly fracking. It rose 300% before any results were announced. When ECR original results were due in June this was top volume and discussion on LSE and the sp was at 0.15+ That's the why I see it on aim bargain price atm for any traders.
But any offer before there is a sustainable quantifiable revenue stream runs the risk of an undervaluing of the company. If we use a price of $900 an ounce for gold then if there is anything upwards of 50 tons of gold which is recoverable then that would give a revenue in the hundreds of millions if my ropey maths is anything like right. This would affect any offer that would be made.
We will have to see what comes out after the Drilling is finished. If the results are as good as or better than we are expecting, then what's to say an offer for the company doesn't come in, of which you haven't mentioned.
The current low share price is unlikely to increase until the answer to two questions are given. How much gold is actually in either or both of the Argentine and Phillipines operations and when will extraction and processing start. I do not see any significant movement in the share price until a sustainable revenue stream is produced. At the current price in my opinion only people who are looking for a cheap long term, i.e. five years plus, investment are likely to buy shares. However, such purchases may not move the share price significantly.
On Friday, the gold price built on recent gains to trade at a six-week high after panic about China's economic slowdown saw US stock markets suffering one of its worst one day falls since the global financial crisis.
In late afternoon dealings in New York, gold futures with December delivery dates added $6.70 or 0.6% to $1,159.90 an ounce, ending at the highs for the day in massive volume with roughly double the daily average number of contracts changing hands.
Gold is now up 7% from a more than five-year closing low of $1,084 struck August 5 as China's economic woes and shock currency devaluation send ripples through markets and burnish gold's allure as a storer of wealth. Gold was also boosted by Fed minutes released on Thursday that indicated a rate hike is less likely in September which hurt the dollar.
The turnaround in sentiment has also spread to large speculators on the futures market which until this week held bearish positions not seen since at least 2006, when the Commodity Futures Trading Commission first began tracking the data.
According to the CFTC's weekly Commitment of Traders data for the week to August 18 speculators' short positions– bets that gold could be bought cheaper in the future –were cut by more than a million ounces to 10.4 million ounces (295 tonnes); down from record levels of more than 330 tonnes hit last month.
At the same time longs grew by 500,000 ounces which means large gold futures investors such as hedge funds, referred to as "managed money" now hold a net long or bullish position, albeit a small one.
That reverses the net short position entered into during the week to July 21 for the first since at least 2009
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