update and shifting hands

I rang the company to today to get a feel for where things are at. Work is going full steam ahead on preparing for the Feasibility Study (calculating time frames, parameters etc). Also the Mining Lease application is being pushed as well - rather an important thing one would think! Environmental studies are underway too and the relationship between UCL and MAK is supposedly the best it's been. I expect from all of that we'll probably get an announcement soon on the framework for the FS.

The positive response on the relationship with MAK made me wonder about the recent corporate changes and the selling that has been going on, all indicative of bad blood and a clean out. I understand that much of the selling has been out of Asia although I wouldn't be surprised if the former MD was selling too as it would be tough to hang around in a company where a relationship might not have ended too well. Between Keng Tin and Frank Reid there's roughly 140 million shares from the last Top 20 published in June. At a rough guess, I would think there could be at least another 40 million shares in the top 20 that could be associated with departing parties. That's 180 million for potentially heavy selling.

Looking at the chart below you can see that we have seen roughly 281 million shares or the equivalent of 15% of the company turned over since around August this year. This has been the highest activity for some time. The On Balance Volume indicator says a net 123 million have been acquired on up days as of today's date which is supportive of net buying and a potential uptrend. The OBV early in Aug was +9 million roughly so that's a net +114 million since then. The OBV is very strong compared with the past certainly in respect of sustained buying which now has a decent trend behind it. Basically there has been selling but the market has absorbed it with some upwards direction implying new entrants (or old returned).

I don't want to over egg it but I am thinking that the activity of the last few months should have cleaned out most of the heavy selling that doesn't want to hang around. There may be some more to come but we should be through the worst of it now and at list the big parcels being dropped of the last few weeks seem to have dried up. Short term the chart looks encouraging with averages turning up and MACD getting positive so if the selling is mostly done then there's a chance for a new base price ahead.