The Kodal Minerals PLC (LON: KOD) share price fell 12.8% after announcing that it had agreed with its funding partners to extend the long stop date for the completion of the funding package announced on 19 January 2023 to 31 May 2023 from the original deadline of 30 April 2023.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The news was insignificant because Kodal and its Chinese partner, Hainan Mining Co. Limited (Hainan), have already agreed on the funding package. In addition, Hainan recently received the necessary approvals from Chinese government entities to proceed with the project.
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YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
Therefore, today’s decline can be attributed to a technical selloff as investors who have seen the value of their shares rise significantly over the past month took profits on their positions by selling them. This is the only logical explanation for today’s significant decline.
Kodal Minerals shares are up 110.64% over the past month, and it is understandable why some investors would be willing to take some of their profits off the table. According to the company, the extension will provide ample time for certain precedent conditions to be fulfilled.
For example, Kodal intends to transfer the Bougouni Project to a new Mali mining company owned by Kodal's recently incorporated UK subsidiary, Kodal Mining UK Limited (KMUK). The restructuring process is currently proceeding and is not expected to be complete by the initial deadline of 30 April 2023.
Kodal Minerals reiterated that all parties remained committed to completing the funding as soon as possible, as detailed in the company’s press release on 13 April 2023. Hainan Mining Co. Limited (Hainan) and its wholly owned UK-incorporated subsidiary Xinmao Investment Co. Limited (Xinmao) have received all the necessary regulatory approvals from China.
Therefore, nothing stands in the way of completing the funding transaction apart from the ongoing precedent transactions. Hainan and Xinmao have received approvals from Chinese Government authorities, including the “Overseas Project Investment Filing Certificates” from the Hainan Province National Development and Reform Commission.
The two firms also received the Company Overseas Investment Certificate from the Department of Commerce of Hainan Province.
A pullback in Kodal Minerals is expected before the stock can rally higher.
*This is not investment advice.
Kodal Minerals share price.
The Kodal Minerals share price fell 12.79% to trade at 0.75p, from Wednesday’s closing price of 0.86p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.