Yesterday, the shares of New World Resource Corp. (CVE:NW), (PINK:NWFFF) won another territory on the stock chart by jumping into a higher trading range. This comes only two days after the company announced “excellent” lithium grade results from the drilling program on its 99% owned Pastos Grandes project in Bolivia.
It seems that investors have reacted positively to the news, though with a little delay. In the last session NW noted a new 2-year price record on a very rarely seen volume beating 17 times the average. During the day the stock actually slipped a bit from its very high open level, thus indicating that the buyers enthusiasm has begun to fade away. Nevertheless, NW finished more than 22% above the previous close.
Currently, New World Resources owns three projects. The mentioned Pastos Grandes is one of the two Bolivian properties, the other one is the Lipena-Bonete copper-gold-silver project where Induced Polarization (IP) geophysical survey commenced in mid-December.
As known from theory, induced polarization is an exploration method which uses either the decay of an excitation voltage (time-domain method) or variations in the Earth’s resistivity at two different but low frequencies (frequency-domain method). A variety of different electrode configurations can be used for the process.
The purpose of the company’s IP survey is to hopefully reveal additional drill targets to the current ones and through future drilling to increase the existing National Instrument 43-101 resource estimate.
If this happens, the shares could continue to fly further up. Otherwise, price movement in south direction looks quite possible. Latest quarter reports reveal some major weaknesses in company’s financials. For the three months that ended Sep. 30, 2010, New World declared a net loss of $183K. The company started 2010 with a working capital of $2.36M, and at the end of September it had diminished to $1.07M. The funds that New World has at disposal are obviously not sufficient. Besides, the company plans to incur additional expenditures in 2011 for the ongoing drilling program at its third property, the Long Valley golden project in Nevada.
