Investors are, of course, delighted. Surely, they were satisfied to hear last Monday that the Canadian Forests, Mines and Lands Minister together with the Environment Minister have decided to approve an environmental assessment certificate for the proposed British Columbia Hydro “Northwest Transmission Line”.
As stated by company’s president, the $404M project is is “a major milestone” and “a key requirement” for the advancement of North Western British Columbia mining projects. This gives Copper Fox confidence that electrical power will be available for the Shaft Greek mine.
This news was preceded by several other favorable company developments, such as the closing of a private offering and disclosure of very promising assay results from Schaft property.
On Monday, the wave of enthusiasm, sparked by these positive announcements, managed to push the stock to an all-time high of $1.85 per share on the TSX Venture Exchange (CVE). Yesterday, CUU equaled this peak level and finished at $1.75, with no change from the previous close.
In February, CUU was shining brightly on the CVE, producing three major jumps and adding 68% to its value. It seems the shares are not willing to stop and are hungry for more gains. Soon, they will be probably aiming at the $2 mark.
Nevertheless, not everything is so bright for Copper Fox as it may look. Some drawbacks that might impede the progress of the shares do exist.
The current market cap is impressive – $643M, while Total assets are in excess of Total liabilities by only $21M. This means investors might have overvalued the company. The fundamentals, however, do not support such a strong market value. Besides, CUU is already overbought.
In spite of this, the company looks financially stable. In mid-February, it raised $3.75M after completing a private placement. If the current cash-spending rate persists, these funds will be sufficient for about 1.5 years.
