Uranium North Resources Corp. (CVE:UNR) (PINK:URNMF) recorded an increased trading activity as the stock price approached yet another resistance level.
Currently trying to bust through the psychologically strong resistance at 50 cents, the stock will likely see another strong correction if unsuccessful. The significant increase in trading volume puts more odds on the breakout, but the intraday action appears to be rather vague despite the increased interests from traders.
The stock is prone of sudden rallies and slow prolonged corrections. It should be rather safe to take up a long positions even before the possible breakout, as in case of failure there will likely be no sudden retracement.
The current market cap of $27.5 million is rather low considering the company recently increased their underlying value through $8 million private capital placement and should now hold a net tangible worth of roughly $20 million.
However, the capital was raised using units, which allow the underlying warrants to be converted at 38 cents per share. This might result in large scale selling by invested parties if the price stays above that level.
The proceeds, which will be used for mineral exploration purposes and as a general working capital, should keep the company in business for a couple years to come, based on the historical cash burn rates.
