Buchans Minerals Corporation (CVE:BMC) (PINK:RRDSF) spiked up during the last trading day after the company decided to postpone the special meeting of shareholders.
BMC gained 50% during Monday’s trading session while 4.2 million shares changed hands. This was outstanding as the average turnover is only 278 thousand.
Technically, the rally might set a precedent for another large price swing up which the stock is very fond off. There were two massive price run ups during the past three years and it would not be odd to see another one join the group.
The fundamental reason for a price run seems to the lie within the last press release. The company said on February 13 their meeting of shareholders was postponed from March 14 to March 26. This particular meeting is important because the shareholders are to vote on an agreement with SG Spirit Gold.
Under the agreement Buchans would sell to SG Spirit their base metals assets for 50% of the outstanding stock of SG, half the membership on their board, a $2 million cash payment and some warrants. This would all go through if SG Spirit manages to first raise $12.5 million in working capital. The transaction would also cause SG to change its name to Regiment Zinc Corp.
The reaction from traders still seems a bit controversial for such an occasion, thus the chances of this rally evolving into something more remain slim.
