First Uranium Corporation (TSE:FIU) (PINK:FURAF) price stayed flat on Monday, following the 15% collapse that occurred on Friday.
The stock tanked shortly after the company published third quarter operational results. Closing at 99 cents per share on Monday, it continues to show weakness and could possibly collapse further down.
The update on operations, which caused such a reaction on the market, showed positive changes in production, but failed to follow up with adequate financial figures. It disclosed an increase in gold sales and stated that production progress is on track to meet projections for 2011. The Ezulwini mine didn’t produce uranium though, as the repairs are still carried out in two columns of the Ion Exchange section of the plant. It won’t be operational at least until the end of March 2011.
For the third quarter ended December 31, 2010, figures were controversial:
• Revenue ramped up 53% to $51.3 million, compared to Q3, 2009;
• Pre-tax loss of $19.1 million, was 21.6% larger;
• The company had $30 million worth of liquid assets – $39 million less than in Q2, 2010.
Most of the negative impact on the financial performance came from the lost production time at the Ezulwini Mine, which was caused by the fall of ground back in November 2010 and the resulting maintenance work. The company will file interim financial report in the first week of February, which should provide more insight on the situation.
Share price could go into consolidation at the $1.00 level but there are no guarantees the short term downtrend won’t continue. The preceding price action depicted a double top pattern, which led to a price collapse and imposed general selling pressure.
