Shares of Xtract Resources PLC (LON: XTR) are down 50.8% from their March highs, with the latest decline happening after the company released further drill assay results from its Buhsranger Copper-Gold project in New South Wales, Australia.
Investors seemed disappointed to hear that most porphyry-style copper mineralisation contained copper deposits instead of gold. The company said that it would drill more holes to discover the scale of gold deposits at the project.
Some analysts have questioned whether the miner can use open-pit mining to extract the copper and gold found at the site. Depending on the depth at which the copper and gold deposits are located, the company might be forced to use more expensive mining methods.
Xtract Resources confirmed that it would start the second drilling phase in Q3 2021. Its top executives are confident that the Racecourse resource, which is part of Bushranger, could be exploited via open-pit mining.
The firm is focused on defining an accurate estimate of the copper and gold deposits at the Bushranger project with the ultimate goal of defining at least 2 million tonnes of copper to meet the requirements for the project’s buyback by Anglo American.
Xtract Resources has taken a different approach to the project, which mining conglomerate Anglo American previously owned. The ultimate goal is to confirm the extent of the deposits at the site and move the project closer to production.
The mining company has its fair share of detractors who question the resource potential at its various sites, including whether any of its projects will proceed to the production stages.
Regardless, the miner’s shares are trading near a significant support level following this year’s decline. As traders, we are keen to see whether the level shall hold, providing excellent bullish trading opportunities.
However, a decisive break below the level would invalidate the bullish setup exposing the company’s shares to further declines.
*This is not investment advice.
Xtract Resources share price.
Xtract Resources shares are down 50.78% from their March high of 8.33p to their current price of 4.10p. What’s next for the miner?
Xtract Resources 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 Xtract Resources shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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