Market cap: 4m
Cobra Resource is a copper and gold exploration company focused on South Australia.
The share price has increased significantly in the last two months, rising between the 1st April and 6th May by 293%.
We then had an RNS announcement on Thursday about a placing before the share price had a drop of 16.9%. Not surprising as shares in issue increased by 19% and placing at a discount of 23.7%.
Despite the placing is the share price poised for a significant upward surge again?
What’s interesting is:
- Book build only open for a day. Why the rush?
- Placing not open to the public. Company knew they would have no issue placing.
- Placing oversubscribed.
- 1hr 40mins after placing announcement the book was closed. Investors therefore had no time to do any due diligence.
- The Wudinna gold Project update (soil sampling data) is expected imminently. Was the rush with the placing to save embarrassment for the BOD? A 23.7% placing discount is embarrassing enough, but what if data is good news and share price goes on another surge, what discount would the BOD have had to announce?
- Alliance Resources have land adjacent to Cobre Gold licences and on the 8th May released positive news (see here).
Has news about soil sampling already leaked to the market? It was noticeable on the 5th May that 44.37m shares traded in the company, 29% of the shares in issue. Why?
Craig Moulton (Managing Director) statement in the latest RNS release stated:
“It was pleasing to see this raise oversubscribed demonstrating the growing support for the Company in the UK capital markets. We look forward to updating the market in the coming weeks on the results of the Stage 2 exploration programme at Wudinna”
No doubt in my mind that Craig is ‘looking forward’ to updating us as he knows the news is positive, as probably do all those who took part in the placing.
Some will have not received their full allocation in the placing.
I like many was disappointed with the placing announcement at such a discount.
Having thought about it logically and looked at what’s happened and is about happen, we are I believe going to get a significant uplift in the share price in the coming weeks. The pointers indicate some in the know will be consolidating their positions next week.
As a private investor I look for clues as well as fundamentals when making my investment decisions. With this share I’m happy to have picked up some crumbs from the top table. I wait to see if reading between the lines pays dividends for my investment portfolio or if I’m barking up the wrong tree.
For information on Alliance Resources announcement and why important to Cobra read here. This blog indicates prospects adjacent to each other and gold at shallow level.
What’s the value of the share price for every 1m ounces extracted? This infographic gives an indication of potential returns.
I wouldn’t be surprised if Monday is a good day for shareholders.