Predicting share prices is a very difficult task. Some general...

Predicting share prices is a very difficult task. Some general points which relate to small cap stocks:

- There a recency bias for stocks of about 15 minutes. AAR recently did a CR at $0.05, there was lots of moaning at the time, but now nobody even remembers that as the share price hit levels above $0.09 this week. This can also happen to RXL quite quickly.

- These low trading volume shares can move up and down quite materially with the smallest amount of buying or conversely selling pressure.

- The current selling (which is quite low) may include shares picked up for $0.165 simply to get access to the attached options? This type of selling will naturally dry up.

- Share prices often settle at or slightly below a CR price temporarily.

Realistically, the company has provided more than enough information to date to suggest that the PFS numbers will be positive. Once the data filters its way into the market, I would hope that this creates some ongoing buying pressure. Likewise I would expect all but desperate (those that need money to pay expenses) sellers will not be willing to sell at a low price like today’s. This share price could easily settle at above $0.25 in July. With the Management Performance Right share price hurdle of $0.25, I cynically expect the bag of tricks to come out after the PFS. Whether that will include disposal of non core assets or the like, time will tell? If the company can achieve a cash injection, that will naturally decrease the financing risk for the period up to the DFS and make the company a more attractive investment.

I do not expect VMC to sell shares. I believe their game is to take dilution hits but to hold their position. With Mr. Hogan as a Director of RXL, I would be surprised if he sold any of VMC’s shares.

This is a macro view that I hold rather than a RXL specific view, but some gold analysts are predicting $US 3,000 gold this year. If that happens, which I believe is quite feasible, I sense that stocks like RXL will play catch up and overshoot other players that have already moved (eg SLR may double but RXL may triple +). There is clearly a disconnect between market cap and value (which the PFS will highlight) and those disconnects never remain permanent.