Sometimes positive company news proves it is worth being published and sometimes the effect is zero or negative. The case with yesterday’s release from Tournigan Energy Ltd. (CVE:TVC), (PINK:TVCFF) is perhaps somewhere in the middle. There was a reaction of the share price on the Canadian market (CVE), but definitely it could have been much stronger.
The stock went slightly up by 5.4% on the announcement of the results from the first for the season infill drill hole at the Kuriskova uranium deposit in Slovakia. Tournigan began the current drilling program three weeks ago. As stated, the first hole “intersected significantly higher grade compared to the current Inferred Resource”. In February, two more holes are planned to be drilled.
The encouraging news managed to raise the stock price a bit. Much more convincingly was it able to increase the investor interest towards the shares of the company. The turnover yesterday was four times the average. Actually, the stock has been steadily progressing for some time: since New Year it has moved 30% up to close yesterday at $0.390 per share.
It is not very clear, however, whether TVC has the potential to advance further up and north on the chart. Tournigan’s fundamentals, more specially its financial reports, suggest that the company has certain capital problems:
- The net loss for the third quarter of 2010 is almost $2M, this is about 315% more than the one for Q3 in 2009;
- Total assets are down 30% in comparison with the relevant period of 2009;
- There is a $1.4M negative operating cash flow.
These considerations made, it is probably no wonder why the prediction of the future TVC performance is a very risky matter indeed.
