Mega Uranium Ltd. (TSE:MGA), (PINK:MGAFF) Continues to Fall on Announced Financing

The shares of Mega Uranium Ltd. (TSE:MGA), (PINK:MGAFF) cannot get rid of their recent fall on the Toronto Stock Exchange (TSE). The decline continues, although a new financing was announced last week and positively looking quarter financing reports were filed.

Yesterday, MGA lost 5% of its value on above the average turnover of $1.8M shares traded. The fall has been going on since last Tuesday. Within five sessions, the stock dropped down by 7.7%.

As for the future performance of the shares: the chart suggests that MGA might find support at at $0.92 and meet resistance at $1.08 and $1.09.

Investors were seemingly not greatly impressed by the announced last Thursday $6.6M flow-through financing. Mega will use the proceeds to explore its Canadian projects.

The latest company financial reports contain positive results too:

As at Dec. 31, 2010, working capital decreased to $38.77M, or by 20%, compared with the end of the previous quarter. Still, the company has solid capital resources available;

Mega recorded a $9.11M net income for the last quarter of 2010 versus a net loss of $1.08M for the relevant period of 2009;

For the three months ended Dec. 31, 2010, Mega managed to cut down operating, general and administrative expenses from continued operations to $1.89M, or by 31%, as compared to the prior year.

Unfortunately, there are also some problematic issues about the company, that could also influence badly the share performance.

Mega owns numerous projects dispersed in several continents. None of them, however, has advanced to the production phase. Currently, Feasibility studies on the Lake Maitland project in Western Australia are in the process of being prepared. Uranium production is anticipated to start there not earlier than in 2013.

Mega expects to incur significant expenditures on its properties in 2011. The planned expenses for this calendar year amount to $18.3M only for the mentioned Lake Maitland property.