As a result of the announcement, SRGE opened the session with a gap at $0.27, but closed at $0.25. Still a gain of 4% was scored and the stock officially broke the resistance of its trading range.
As a result of the surge the trending indicators bolstered the bullish signal which was emitted three days ago. The MACD line bounced off its moving average on Monday, while the 4-MA and the 9-MA formed a bullish cross at the same time.
The announcement, which brought some fresh air in the stagnant stock, revealed that SRGZ received a preliminary approval form the United States Forest Service for its plan of operations to drill at its Longstreet project. This way, SRGZ will be able to drill 48 exploratory holes with regard to its mineral exploration program.[BANNER]
Being an exploration company, it can be expected that SRGZ does not possess very impressive finances. In this respect, the company’s management admits it plans to finance SRGE through issuance of its common stock. As of January 31, 2011 the company had a total of 62,960,000 shares outstanding out of 300 million authorized, which means that there is still plenty of opportunities for dilution.
In a more general view, it is visible that SRGZ has suffered a tremendous depreciation in a relatively short time period. The company stock is now three times cheaper than its level at the end of 2010. It seems that investors are waiting for more encouraging news in order to reward SRGZ with their trust.
