“It is high time we rolled this stock back up!” We might, justly so, suppose that such is the wish of the managers of Virginia Energy Resources Inc. (CVE:VAE), (PINK:VAERF). The company’s shares, struggling heavily since March, really showed signs of recovery during the last two sessions. More important is, perhaps, whether the stock has started its come-back, or the current rise is simply a temporary and short-lived event.

Virginia_Energy_-_Chart_-_5_May_2011.jpgFor the time being, the market data shows VAE has advanced 20.6% since Monday. Yesterday, the stock ended at $0.205, gaining 5% from the previous close. Much more impressive was the trading volume of $2.2M that exceeded over ten times the average. It was partly due to some insider activity.

So far, the shares managed to stop their steady downfall, which began in early March. Over the last two months, VAE has lost two-thirds of its value, tumbling down by 67% from $0.60 to $0.20.
Things got additionally worse after the tragedy in Japan in mid-March. As we mentioned in earlier articles, it led to a sharp decline in the price of many uranium stocks traded in Canada.

The present rise might have something to do with a company announcement from this Tuesday. Virginia initiated metallurgical studies for its 30%-owned Coles Hill project in the USA. The goal of the company is to develop a strategy that would maximize uranium recovery with minimum capital costs.

In late April, Virginia declared it was pleased with the preliminary results from the exploration program at its Hatchet Lake uranium project in Saskatchewan.

Virginia_Energy_-_Logo.jpgHowever, these favorable announcements do not guarantee the recovery of the shares will continue. To the negative facts about Virginia, we should add the significant net loss of $2.1M, recorded by the company for the last quarter of 2010.

On the other hand, Virginia is financially stable with a cash position of $7.5M and a working capital of $4.6M in the end of 2010. Besides, the company seems undervalued by investors. The present market cap of $20M is three times less the $60M net worth of business. This leaves plenty of space for further come-back of the stock. Which, of course, does not mean the shares’ recovery will continue.