Sunward Resources Ltd. (CVE:SWD) (PINK:SNWRF) stock has attracted attention with a random increase in trading activity, but the company doesn’t have anything new to show.
With three times the average trading volume recorded on Tuesday, Sunward is attracting attention to its stock. Most of this volume was generated by the end of the session, thus allowing to assume the action could continue. The price gained 2.5% during the last session.
Some buyers might have come as a result of a recently posted interview with the company’s chief operating officer David Forest, who obviously had only pretty things to say about their Columbian gold-copper project named Titiribi.
Sunward operates on lands which hold seemingly small mineralization levels reaching on average 0.5 g/t of gold, but also allow for a small cutoff of 0.3 g/t. The area hasn’t been explored much to date and apparently higher grade zones have been found recently.
The findings should be taken skeptically as Sunward still doesn’t generate revenues from them, just drills around to see what can be found. On the other hand, they are funded well enough with $64 million in cash and can afford to operate the current 9 rigs without raising any concerns. Sunward also plans to add two more during the next couple of months.
That is encouraging and disappointing at the same time. Their position is good enough to sustain the current P/E ratio of 3, but not good enough to raise it. Exploration stage companies usually hold a ratio of up to 2, but Sunward’s strong liquid assets position has allowed alleviating it somewhat further.
The technical analysis shows that changes might be coming as price action has formed a pattern similar to a symmetrical triangle. This might attract more traders and from the looks of it favor bears slightly more as the price could hardly find a reason to rise further up.
