Yesterday Mega gave traders lots of information to digest. In a fresh press release, the company provided an update on its Canadian exploration activities with three major highlights:
- A 7-hole or 1.800 meter diamond drill program designed to test a structural target beneath Mustang Lake;
- Discovery of additional REE mineralization at Byron Bay property in eastern Labrador;
- Signing an option agreement with Cameco Corporation, under which Mega and Forum Uranium Corp. may jointly earn a 60% interest in the North West Athabasca uranium property in the Athabasca Basin, Saskatchewan.
The announcement seems encouraging enough. However, it had a negative effect on the stock performance on the Toronto Stock Exchange (TSE). Instead of going up, MGA continued its fall. In the last session it dropped 6% on above the average trading volume, finishing the day at $0.80 per share.
Maybe, investors did not manage to digest the abundance of information contained in the release, or perhaps they did not perceive it very well. It is possible that their reaction comes a bit later.
Despite the discouraging recent performance of the shares, the company certainly has its potential. As mentioned in an earlier article, the latest filed Mega financial statements indicate positive trends.
It is enough to remind that the company reported a net income of $9.11M for the last quarter of 2010, versus a $1.08M loss for the relevant period in 2009.
Only the future will show when Mega will manage to reverse the current pull-back in the share price. A positive factor for the company is the rising, as a whole, uranium price over the last several months.
However, Mega will be able to profit from this situation after its numerous uranium projects reach the production stage. Surely, company’s representatives, together with many investors, are eager this to happen as soon as possible.
