This was probably the main reason why during the last session MBG was in such a great, never seen by far, demand by investors. Yesterday’s volume of 3.48M shares was a record for Malbex, exceeding almost ten times the average turnover. At the same time, the stock closed trading at $0.73, gaining about 24% from the previous close.
The surge was driven by the release of encouraging drilling results from the company’s Del Carmen gold-silver project located in Argentina. The announcement indicated “higher-grade mineralization” at the property, including 23 metres at 5.51 g/t gold and 20.4 g/t silver.
The future progress of the shares, however, is not at all guaranteed. The positive effect of the news might quickly fade away, which means the price will probably go down. Actually, the stock did not progress during the last session – the open price was equal to the day-close, and a long-legged Doji was formed on MBG chart. It implies there is a high indecision in the market.
Besides, the company looks a bit overvalued by investors on CVE. The current market cap of Malbex is $74M, while the tangible net worth of the business is about $22M.
Finally, it is worth mentioning that despite the company had $9M in cash in the end of 2010, it continued to incur significant losses. For the last quarter of 2010, Malbex recorded a negative net income of approximately $2.58M. The company is still in the exploration stage and has not earned any revenue as yet. After all, as we know, making a profit as the ultimate goal of each business.
More hot detais about Malbex Resources you may learn from the latest company presentation, or from the video interview with the president Mr. Tim Warman.
