Threegold Resources Inc. (CVE:THG) (PINK:TRLDF) stock recorded heavy buying pressure on Friday with no apparent reason for it. The inflated price didn’t last long.
THG slipped nearly 7% lower shortly after the open on a simple correction. The stock had went up nearly 32% on Friday, on a morning spike likely caused by short squeezes. The sudden unprovoked increase in trading volume confirms this as well.
The company had no recent news, thus such a price increase wasn’t sustainable. On the way down there are two support zones at 13 and 11 cents per share. The stock price might stop at one of those, as it doesn’t really have any reason to sustain strong selling pressure for longer. Threegold’s current market cap of $12.6 million is barely above their underlying book value of $11.8 million, leaving quite some space for share price appreciation and sheltering it from drops.
The most recent news by Threegold were promising, but only meant that Threegold can relocate their capital, not create more worth for the shareholders. The company announced October 12 they have amended an agreement with Ressources Appalaches (TSE:APP) which now allows the company to increase their interest in Montde-l’Aigle project. Threegold obtained an option to acquire 100% interest by paying $300 thousand in cash and issuing 1.5 million common shares in three installments.
