Noting a lot of concern re the recent share price action. Many quality companies have been in downtrend from recent highs - many investors take profits or just go to cash and sit out volatile markets such as we have been experiencing, only time will tell who makes the correct choice and the 'correct' choice is different for each investor.
The attached chart shows EUR weekly price along with the Global X Lithium & Battery ETF listed on NYSE (heavy black line). You will see the two have some degree of correlation so sometimes the EUR price trend is also due to external factors, general market sentiment or sentiment about lithium etc.
I note that at the forthcoming AGM, Resolutions #10 to #12 seek Shareholder approval for an extension of the terms of the 40m performance shares for the Directors (refer to p22 of the Notice of General Meeting). They seek to extend the milestone date for achieving a $250m market cap from 1st July 2022 to 31st Dec 2022. Reasons given are:
"The definitive feasibility study for the Company’s Wolfsberg Project has been delayed as a result COVID travel restrictions and Russia’s invasion of Ukraine, and is now expected to be completed in the third quarter of 2022."In considering the above noted proposed resolution; the history of the project's progress; and the correlations on the attached chart; my view is that the most recent selling is potentially being driven a lot by concern by some investors at the proposed Avebury Nickel Project acquisition. Some investors (like myself) have been taken by surprise by this proposal, the cost, potential risks, the distraction that it may create for mgt, etc. so they reduce holdings, de-risk, etc. It's difficult to predict where this SP will be in 3 or 6 months however on the other hand I also see the potential opportunity of:
(i) the acquisition if it should crystallise; and
(ii) the opportunity to accumulate shares in EUR at a significantly reduced cost.
It comes back to belief in the project, resource etc., and mgt ability to progress it. At the end of the day it's up to each investor to weigh up the information and how they wish to respond. Selling will crystallise a loss for many versus holding on for the long term or averaging down if you're caught at a higher average price.
Disclosure: I have been a holder of EUROA options since April 2021 and I have been accumulating EUR FPO shares this last week.
