Interesting to see that the offers in AIM have thinned out considerably over the last week (at least on screen). Seems that a lot of the loose shares out there have been taken up by the buyers … factor this in with a fair amount of news due out in the very short term (drilling in Perkoa and Mumbwa, Offtakes and Finance etc) and it seems that we might be on the cusp of the next move upwards. For me, I’m looking at the next move through 38c as confirmation.
Have been kicking my own set of figures around on the share price and I guess the one big difficulty anyone has on trying to ascertain where this thing will end up is the amount of variables out there at the moment. Perkoa is shaping up to be quite interesting on the basis of (a) much stronger potential hedge price than what was first kicked around by Lonsec a while back; (b) additional drilling in the immediate vicinity of the current mine which has a fairly high likelihood of being able to extend the current resource over the course of 2007. The one thing I am a bit wary about is the actual time until production (and therefore earnings). Once this company is actually earning income and P/E ratios come into play this price really could end up anywhere.
Mumbwa seems to be the real wild card in amongst all this. A fair amount of AIM’s share price can be attributed to Perkoa so one would assume that any further positive drill results could rapidly shift the shareprice into relatively unchartered territory.
One thing that has me a little bit perturbed (and thus watching the price very closely) is the potential for a market correction. With bond yields heading up I think the risk associated with a correction is increasing … a moderate (and healthy) correction would be good as it will let a lot of the hot air out of the market. We saw AIM hold it’s own last week against some pretty adverse conditions. Having said that though a savage correction could have some fairly detrimental effects on AIM.
Interesting times. Watching and waiting … and as usual please do your own research.
AIM Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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