Pele Mountain Resources Inc. (CVE:GEM) (PINK:GOLDF) stock price jumped up after the company promised they will soon issued a preliminary economic assessment of their main property.
GEM stock price advanced 15.4% on Thursday. The related trading volume topped 2.6 million, which was more than 6 times the average of 414 thousand. Technically GEM price found a bottom at 12 cents per share and this was a second attempt to bounce that level this year.
The 50 day MA at 14 cents per share could provide some support this time, but it didn’t really work well in mid January, thus it’s more of a reference point than a significant price level.
Thursday’s price action was an extension of the price rally recently induced by a news announcement. On January 31 Pele published an update for their Eco Ridge mine rare earth and uranium project in Elliot Lake, Ontario. According to the news report the preliminary economic assessment is nearing completion and will include an updated resource estimate as well as the impact of new processing circuit, which improves the recovery of rare earth oxides.
No word on when exactly to expect the actual preliminary economic assessment but this press release gave a significant heads up and caused some tension on the market.
Financially GEM is in a decent situation, but will require a large funding round if they decide to go into more involved mining. To date the company was raising three or four millions of dollars per year from the sales of capital stock. This practice created a dilution rate of 30.2% over the last year, just to pay for the exploration costs.
