The stock of NWM Mining Corporation (CVE:NWM), (PINK:NWMMF) is in a negative mood again. Yesterday, it looked down on the price chart and fell on a large volume on the TSX Venture Exchange (CVE). Investors had better kept an eye on the shares to see if the bearish move would continue in the coming days or the market’s attitude would reverse in favor of the stock.
On a volume beating three times the average, the shares fell 13.3% down and finished the session at $0.13. This does not look very encouraging, taking into consideration that a month ago NWM was traded at $0.175, while in end-February it touched the $0.20 level for short.
As for the further performance of the stock, on one hand, there are positive developments that might help it rise in the future. Certainly, we must remind that in early March NWM was granted the crucial mining permit for the Jojoba open pit gold mine. This mine is situated next to the company’s Lluvia gold mine. NWM anticipates that the two mines have an ore mining rate of 10,000 tonnes per day by the end of 2011.
At the same time, the company’s subsidiary Minera Columbia de Mexico SA de CV (MCM) received a construction permit for the Lluvia Dos pad. In addition to this, a week ago NWM was glad to inform about the identifying of a new area of gold mineralization at the Lluvia-Jojoba deposit.
On the other hand, we should not miss mentioning the negative factors too, as such do really exist. Financially, the company is not very robust. It recorded a net loss of $6.15M for 2010. Moreover, we notice large stock dilution over the past year. The average number of shares jumped from $126M in 2009 to $230M in 2010, or by 82.5%.
Inspite of this, NWM Mining is far from struggling. The corporation ended 2010 with $4.5M in cash. If the present spending rate stays the same, this should be sufficient for about nine months. Besides, as announced in April, NWM drew additional funds to the amount of $3M under its amended standby credit facility for $16.5M.
