Yesterday, Roxgold Inc (CVE:ROG) (PINK:ROGFF) continued to trade very actively in relation to the latest update on drilling results, but the share price seems to have somewhat stabilized.
ROG lost another 3.5% on Wednesday and had a huge volatility due to massive engagement from traders. The trading volume was large for the past two days, and yesterday 6 million shares changed hands which was nearly 7 times heavier than the 90 average turnover.
On Tuesday, April 24, Roxgold announced the assay results for their 21 core holes done during the phase three drilling program done on Yaramoko property in Burkina Faso. The most significant results showed interception of gold baring areas up to 3.7 meters long and holding up to 113.04 grams per tons of gold. The average grade would be significantly smaller, since many holes returned single digit values.
The assays added to the overall of 80 holes explored on the 55 zone. Thus far the average findings constitute of an average true width of 3.8 meter and a weighted average grade of 20.72 grams per ton of gold.
The findings clearly weren’t good enough to traders. Since the company’s market cap was already more than twice their net book value, the drop in share price was a natural outcome, which might continue for a while.
The company’s steady updates and comparatively good findings on the property won’t allow the market to undervalue their stock for long, but the preceding short term downtrend has given strength to bears in this case.
The stock has support zones every 25 cents, so it’s very likely to bounce if the price would hit either 75 or 50 cents per share.
