Yukon-Nevada Gold Corp. (TSE:YNG) (PINK:YNGFF) stock approached an important support level at 65 cents and is looking to break further down as far as the momentum goes.
Little attempt to breach the support has been made yet, but the trading volume has picked up in the recent few sessions, showing slight signs of panic selling. The price has gone flat for the time being, which is a sing of indecision. 70 cents now provide a considerable resistance, so a breakout should be made soon as the channel for fluctuation is very narrow right now.
Fundamentally the company doesn’t look very healthy, with the only exception being the rate of revenue growth:
• Revenues have been growing on average 59% per quarter for the past year;
• Most of YNG’s value lies in properties, not liquid assets;
• Large losses are burning cash fast;
• Gross profit margins remain very low;
• Means of recent financings pose a threat of dilution to current shareholders.
Yukon is running gold projects, which hold potential yet to be realized, yet there were no updates on operations since late November.
Without news in effect the price clearly cannot hold at inflated levels, as proven by the downtrend that started forming shortly after the last update. Market cap is still more than 4 times the net tangible worth of Yukon’s business, thus there is plenty of space for share price depreciation.
