The disclosed assay results were from the ongoing diamond core drilling program at the La Josefina Project in Argentina. Thursday’s announcement confirmed the “high-grade gold mineralization” at the deposit. The release contains some quite encouraging figures: 19.47 meters true width of 18.83 g/t (grams/tonne) gold, including 3 meters true width of 62.87 g/t gold for drilling Hole SSI-D11-278.
The favorable effect from the news was more than evident. On the TSX Venture Exchange market (CVE), the shares flew 64% up within two sessions. Last Friday, HMX noted a 10-month peak at $0.475, which is not very far from the 52-week high of $0.50. On both of the last two trading days, the volume was large and confirmed the stock’s rise.
On the American OTC market, where the shares have been traded since this February, the progress was even more remarkable. On Friday, HMXZF set two records – a price high of $0.4995 and a volume record of 231K shares. The stock made a huge gap up and gained almost 51% from the previous close.
In spite of the current positive mood of the company’s shares, we should be careful when predicting their future behavior. The latest financial reports, filed only a week ago, indicate some not so pleasant trends. These include:
* A net loss of $3.22M for 2010, 51% larger than the 2009 loss;
* A significant stock dilution – over the past year, the number of common shares has increased by 64%.
At the same time, Hunt is with no major financial problems. At the end of 2010, the company had $6.36M in cash and a working capital of $6.12M.
Implementing some technical analysis, we could make two notes. First, HMX managed to break through the upper Bollinger band, which is considered a bullish sign. Secondly, MFI is above 80, therefore it has entered the overvalued area. As we see, the signs are somewhat controversial; besides, they need confirmation to be regarded as reliable.
