Shares of Kodal Minerals PLC (LON: KOD) have fallen 36.5% since hitting a new multi-year high of 0.488p on July 1, 2021. Can they reverse course and head higher?
The mining company’s shares had rallied higher throughout most of June after Mali’s government approved the company’s feasibility study for its Bougouni Lithium mine.
At the time, I explained that we were likely to see a significant decline in Kodal’s share price in the future, given the significant rally that had just occurred.
Well, the downtrend followed soon afterwards and has been in place for most of July. However, the trend has recently accelerated, indicating that it is almost over.
Investors looking to buy the shares may get an excellent opportunity to buy the shares in future.
Kodal shares are likely to rally higher once the Malian government approves the company’s mining license.
The firm recently announced that the mining license was in the final approval stages, which provided a brief reprieve for its share price, which rose slightly on the news.
However, we could get a strong rally once the mining license is issued and Kodal starts production activities at its world-class Bougouni lithium mine.
Kodal also updated its Nielle gold project in the Ivory Coast, whose air-core drilling results had shown widespread drill traverses confirming a 4.5 kilometres gold mineralised trend with extensions of up to 1.5km south over 1km north.
Bernard Aylward, Kodal’s CEO, said: “Our Mining Licence application for the Bougouni Lithium Project is now in the final stages of approval. The new Mining licence decree has been drafted and verified by the Mali Ministry of Mines and forwarded to the Secretary General's office,”
To conclude, Kodal shares are likely to rally higher once they receive their Bougouni mining licence. As a result, aggressive traders may look to establish bullish positions around the 0.30p to 0.275p level, which have acted as support in the past.
However, nothing is guaranteed in the markets, and a break below this zone would invalidate the trade idea.
*This is not investment advice.
Kodal Minerals share price.
Kodal Minerals shares are down 36.48% since June and are headed lower. Can they reverse course?
Kodal Minerals shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Kodal shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 68 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .
Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading