Manitou Gold Inc. (CVE:MTU) stock ended Monday’s trading session with a doubled in value after the company struck a vein of very high grade gold on their property.
MTU got halted before the news came out, so the effect on share price was partially impaired. Still the stock added more than 132% over half the trading session on trading volume that was 282 times the average.
Manitou announced to have intersected a massive 53.7 kg/t gold mineralization over 0.55 meters of core length in hole KW-11-26. The find on the Kenwest Property is obviously more of an entertainment as surrounding mineralization levels were far off a different scale and averaged 1.99 g/t. The actual widths of mineralization are currently unknown as well.
Share price hit a new 52-week high upon the news announcement. The market cap quickly went over $21.5 million, or 3.5 times the net tangible worth of the business, ignoring the fact the company has no revenues.
Even with the promising findings on the property, the current valuation is slightly over the top. The company is in the process of evaluating their property and realization of the found resources is still far in the future. Until revenues are seen on the income statement, the stock isn’t likely to stay up for long. The current rally is only a sign of emotional reactions by traders.
