NI Weekend take on the weeks happening..... Speaking of volatile...

NI Weekend take on the weeks happening.....

Speaking of volatile weeks, spooked investors and overdone pricedrops, our latest Investment StGeorge Mining (ASX: SGQ) definitely had an interesting one.

Tuesday morning SGQ came out of halt to announce it is acquiringan advanced stage niobium and rare earths project in Brazil and a capital raiseto fund the acquisition.

(we participated in this cap raise)

We chose to put cash into the placement and add SGQ to ourPortfolio because its advanced stage project sits right next door to thelargest niobium mine in the world.

Also, money appears to be flowing towards niobium projects (WA1capped at ~$880M and ENR capped at ~$220M) and rare earths in Brazil (MEIcapped at ~$220M and BRE capped at ~$581M ).

So SGQ is at a $55M post transaction market cap, with anadvanced stage niobium and rare earths project, and our rationale is that themarket should re-price SGQ upwards.

Despite SGQ coming out of halt with the new project on one ofthe worst weeks the market had seen in years, all was looking good with theshare price trading up around 4c and hitting a high of 4.4c.

But then a couple of posters on hotcopper and social mediastarted trying to find and post something negative about the project that may have strayed into spreading “mis-information”.

Finding potential issues with a project is important, and wecertainly encourage and like to see it happen… it helps us in our ongoingresearch and analysis.

Provided the criticisms are true and factual.

On Wednesday SGQ traded up again until around 12pm AEST when outof nowhere the sellers overwhelmed the buyers and the stock ended the day allthe way back from ~4c to 2.5c per share.

In the bleak global market conditions of the week - fear wonout.

The sudden share price drop was strange enough that SGQ putitself into a trading halt on Thursday morning pending the release of anannouncement to “correcting mis-informationcirculating in the market in relation to the Araxa Project.”

The trading halt says that SGQ would address it with anannouncement by Monday - we will be watching to see what it's all about.

It's hard to know for sure what the “mis-information” is,especially nowadays where there are hundreds of opinions posted anonymously, inreal time across social media and other forums.

What we can say for sure is that there are always cynical takeson just about every investment opportunity out there, it’s healthy and all apart of investing.

(again, provided it is factual and accurate - the sameabsolutely also applies to positive information provided about a company)

Before its discovery, there were those who said WA1 was wastingits time and shareholder funds drilling in the middle of nowhere before it madea game changing discovery in the West Arunta…

There were those who said Woodside’s assets in the North WestShelf would never amount to anything…

And there were those who said Fortescue Metals Group would gobankrupt all the way back at its lows in 2015.

These are obviously rare, cherry picked winners, but the pointis that there will always be people pointing out what’s potentially wrong withalmost anything.

As long term Investors in SGQ we are looking forward to thecompany’s response which should be out on Monday.

We expect an interesting day of trading should it turn out thatfalse information was being spread and is responsible for the Tuesday afternoonsell-off in SGQ.

We will look to put out our take on the announcement once SGQprovides the market with a clearer picture on what the “mis-information”is.

Based on our own research, the project and similar companies inthe market, our thesis still stands that SGQ re-rates once the market digeststhe project in full and the transaction is complete.

We are Invested at 2.5c, our plan is to hold a position for 3-5years and see how far SGQ can take the project.

And hopefully this “mis-information” based sell-off is just ablip in the short term.

We’ll find out on Monday.