{"id":308901,"date":"2010-02-11T12:00:00","date_gmt":"2010-02-11T17:00:00","guid":{"rendered":"e2249889-c78b-43e3-9643-b1d7d4aa587b:394701"},"modified":"2010-02-11T12:00:00","modified_gmt":"2010-02-11T17:00:00","slug":"prepare-for-junior-mining-heartburn","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/308901","title":{"rendered":"Prepare for junior mining heartburn"},"content":{"rendered":"

The fourth quarter of 2009 was an awfully good one for junior mining companies, as they took advantage of positive metal market conditions to raise a boatload of money. But now investors may face a comeuppance.<\/p>\n

In a note titled "Heading for Heartburn," the junior mining analysts at Canaccord Adams suggested that the TSX Venture Exchange could face selling pressure in March as a result of the wild capital-raising activities from last fall.<\/p>\n

Analysts Wendell Zerb, Eric Zaunscherb and Nicholas Campbell broke down the Venture Exchange financings in the fourth quarter and found that the "bulk" of the capital raised by mining-related companies through private placements (about $700-million) closed in November. So in March, the four-month trading restrictions on those private placements will end, and a flood of new paper could suddenly hit the market.<\/p>\n

"Although numerous factors influence the valuation of small cap mining-related stocks, the added selling pressure of new free-trading paper in what is already a low-liquidity environment should not be overlooked," the analysts wrote.<\/p>\n

Just how negative the influence will be depends on other factors, like overall market sentiment. However, the analysts did point out that the share prices of a number of the companies that raised money in November have already fallen back to pre-rally levels, and investors would not be likely to sell those names if they have already lost money on them.<\/p>\n

"The overhang of free-trading paper is more likely to create a ceiling that, if breached on the upside, will introduce new selling and as such create a sideways trend in the market," they wrote.<\/p>\n

Peter Koven <\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The fourth quarter of 2009 was an awfully good one for junior mining companies, as they took advantage of positive metal market conditions to raise a boatload of money. But now investors may face a comeuppance. In a note titled "Heading for Heartburn," the junior mining analysts at Canaccord Adams suggested that the TSX Venture […]<\/p>\n","protected":false},"author":4061,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-308901","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/308901","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4061"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=308901"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/308901\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=308901"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=308901"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=308901"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}