Shares of Horizonte Minerals Plc (LON: HZM) fell 3% after the company released its 2020 annual results showing that it made a £2.4 million pre-tax loss.
The nickel development company, which is yet to generate revenues, said that it had a strong cash position of £10.9 million as of 31 December 2020. The company later raised £18 million via a share placement in February.
The last time we covered Horizonte Minerals, we noted that its shares were trading near a significant support level, and nothing much has changed since then. Its shares are still trading near the level we identified at the time.
If the support level continues to hold, we are likely to get a significant rally given that the next resistance level is 3p away from its current trading price of 7p, representing an almost 50% gain.
Horizonte Minerals noted that it had made significant progress in raising the funding needed for its Araguaia project located in Brazil. The company had secured a $325mln senior debt facility to fund part of the project’s development.
The nickel company said that it had achieved significant business and project level milestones in 2020, including completing the value engineering for the Araguaia project, which resulted in improvements that would enhance operational performance.
The company also made key appointments to its operational and corporate teams in London and Brazil. The firm appointed Sepanta Dorri to the Board and a non-executive director.
David Hall, Horizonte’s chairman, said: “We continue to be grateful for the support of our shareholders, and we are pleased to see increasing interest in the Horizonte story from new investors and strategic partners. Horizonte has reached an exciting phase of its journey, and we believe we are able to offer a unique and compelling investment opportunity.”
Long term investors might find the company’s current trading price quite attractive given the upside potential. However, nothing is guaranteed in the markets, and we could get a break below the support level and an accompanying downtrend.*
*This is not investment advice.
Horizonte Minerals share price.
Horizonte Minerals shares fell 3.01% to trade at 7.08p, dropping from its opening price of 7.30p.