KWG Resources Inc. (CVE:KWG) (PINK:KWGBF) ended Tuesdays trading session flat as the stock possibly found some support on its recent streak of declines.
The new found support is just above the 200 day moving average, which is currently at 0.1145. Technically, this price level is already below the stronger support at 12 cents, but could still hold, as the longer term moving average offers a strong mental backbone to the price movement.
Since the stock bounced the 14 cents level back in January, even some seemingly important news couldn’t bring it back up. Trading volume barely reacted to the most recent acquisition of net smelter royalty on three chrome deposit claims.
Of course the NSR will paid for using potentially dilutive instruments. 4 million treasury units will be issued at 10 cents per piece to pay for it. The underlying warrant carry a conversion price of 15 cents.
On February 1, the company finally announced the completion of $3 million private placement. KWG President Frank Smeenk also advised that the company operates under adverse weather conditions, while trying to set up a proper storage facility in Northern Ontario.
The diversified nature of the announcements held the share price in place, allowing it to only move inside the predetermined channel. A massive amount of outstanding, potentially dilutive, warrants and options doesn’t provide much trust either.
