Canadian Orebodies Inc. (CVE:CO) (PINK:CNOBF) added more than 73% to the share price on Monday as the company said they will acquire 80% interest in the James Bay Lowlands in the Norton Lake deposit.
The deal is only described through a letter of intent, which doesn’t necesarrily mean it will go through. The company will be required to pay the current owners, East West Resource Corp., $10 thousand in cash and isssue 280 thousand shares of Canadian Orebodies as well as comission a VTEM airborne survey on the property. 20% carried interest will be held by East West until a bankable feasibility study is produced.
The price gap up quickly put a $20 million market cap on the business, which might be over the top already, considering the company will acquire the property for less than a hundred thousand dollars. The current net tangible worth of the business is slightly more than $3 million, which suggests the share price likely won’t be flying high for long.
Since the breakout brought it a new high in over 2 years, it’s difficult to determine the support and resistance levels. One technique to use is the pivot point calculation. Taking into account the previous day’s trading information it can be found that major resistances are at 35 and 38 cents levels and supports can be found at 27 and 21 cents.
27 cents level also relates to support recorded nearly three years ago. The price has not been above 36 cents level since the stock started trading below $1.
