For no obvious reason, on Friday the stock of Newstrike Capital Inc. (CVE:NES), (PINK:NWSKF) went substantially up in terms of both price and volume. New highs were noted, as an increased interest towards the company shares was also witnessed.
In the last session, NES managed to equal its 52-week high of $1.65, on the background of 1.23M shares traded. This is well above the average turnover. On the American OTC market, NWSKF was even more successful. Here, the stock set two new records – a price peak of $1.70 during the day, together with a record for the company turnover of over 101K shares.
Newstrike has issued no new announcements that could provide an explanation for this sudden stock surge. The latest company news was released in March. It sounded quite positive: promising gold mineralization results from the Ana Paula Project in Mexico and the appointment of an experienced professional – Dr. Wojtek Wodzicki – to the company’s board of directors. Mr. Wodzicki holds a doctorate in Geo-science and is also a President of NGEx Resources Inc.
Additionally, Newstrike hired Geptech Ltd. to conduct a high-resolution airborne survey for the Aurea Norte property in Mexico.
It is possible that some investors have reacted with a delay to the news and hence the current surge of the shares. The other usual suspicion is a speculative interest towards the stock of the company.
There are also several negative factors around Newstrike that need to be mentioned. The company has not recorded any revenue yet, and reported a net loss of $0.57M for the quarter ended Jan. 31, 2011.
In spite of this, it looks financially very stable – with a working capital of more than $4M in the end of January. This does not take into account the $17.7M financing completed in February through a private placement.
The latest company’s presentation will provide you with more important details about the development its numerous projects.
