Lexam VG Gold Inc. (TSE:LEX) (PINK:LEXVF) share price decline has picked up a pace and could be looking to break even further down on increasing selling pressure.
Currently just broke an important support at 99 cents. The stock has a significant trading volume associated with it, indicating strengthening sell sentiment among traders. The closest support level below is at $0.91. Even if the price doesn’t go further down, the current situation will most likely end in short consolidation period between news announcements. If it breaks the $0.91 level, a sharp drop back to 70 cents would be possible as well.[BANNER]
The stock traded heavier than usual since the company was removed from the S&P/TSX Venture Composite index at the last day of 2010. The news came shortly after VG Gold Corp. acquired the business.
The recently published initial resource estimate for the Paymaster West Project could actually help sustain the share price above the key support lines. The company has expanded their estimated gold resources by nearly 190 thousand ounces under indicated category and 154 thousand in the inferred category.
Under the current gold price of $1385 per ounce, the company’s potential reserves top $2.16 billion. Of course the comparatively average grade of ore won’t allow for quick extraction of these resources, but the potential look exciting nonetheless.
