White Tiger Mining Corp (CVE:WTC) (PINK:WTCZF) is holding the gains after the stock price shot up 38% on Tuesday, upon the announcement of copper finding on the Marshall Lake property.Share price gaped up after the company provided an update on its phase two drilling program ongoing on Marshall Lake “RM Zone” discovery in Ontario. The first drill hole on this copper-silver-gold property has intersected two significant mineralization zones.
The two zones included 101 meters and 57 meters of chalcopyrite stringer (the most common compound of copper). Historical data for the region where the hole was drilled depicts a 1.58% copper over 15 meters and 2% chalcopyrite over 31.5 meters. Although these numbers are outdated and do not meet the Ni-43-101 evaluation standards, the management stated to believe in their validity.
The news was moderately good – the company proved to have copper on their property, but it still lacks capital to do further exploration. $1.5 million private placement was announced on December 30, 2010, but hasn’t been completed yet. The findings might accelerate the matter, but on the other hand it will also cause 46.1% dilution straight away, with a possible 23% further dilution from the conversion of warrants.
This positively tailored press release made a significant impact on the company’s share price. Though the financial situation of the business is still indecisive, it seems the stock has no problems trading near its new 52-week high.
The liquidity is an issue though. WTC was never able to sustain a low volatility and liquid trading environment, which turned out to ignite a rapid share price growth upon good news. 40 cents is now the most reliable support level, though profiting from such a poorly trading stock will be hard for short sellers even in case of price collapse.
