Bulls were dominating Minera Andes Inc. (TSE:MAI) (PINK:MNEAF) stock on Thursday in the light of news with unclear significance.
MAI had a significant reaction to the latest news, although the stock price remains stuck below $1.95. The trading volume reached 2 million on Thursday, which is more than twice the 90-day average of 854 thousand.
On October 27, Minera addressed the issue that the government of Argentina has changed the 2004 decree and the mining industry is no longer exempt from the requirement to repatriate revenues from exports. The management stated they will have to evaluate the exact effects of this change and will keep the shareholders up to date.
The news, mixed with previous day’s increase in trading activity, allowed bulls to take the buying opportunity because of the unclear expectations and possibly limited impacts of the event.
The company’s stock price currently puts their market value at $542.8 million. It’s a rather high end valuation considering the net tangible assets of $181.2 million. That is because the company has no real income – their top line records amount owed by Minera Santa Cruz, with which they jointly develop the San Jose Mine. These are not real cash payments, but accounting gimmicks related to an outstanding project loan.
