Tag: Motley Fool

Macquarie Telecom Group Ltd (ASX: MAQ) shares headed lower today following news the telecom service provider has signed a new deal with Optus. By the market’s close, the Macquarie Telecom share price had slumped 3.35% to $46.97. 

Let’s take a closer look at the company’s new agreement.

Macquarie Telecom just said ‘yes’

The Macquarie Telecom share price is sliding lower today after it was reported in The Australian today the company has ended its existing wholesale mobile contract with Telstra Corporation Ltd (ASX: TLS), in favour of Optus. 

According to The Australian, Macquarie Telecom has signed an exclusive deal worth approximately $34 million “with Australia’s second-biggest telco to deploy mobile services including 5G to its 100,000 business customers”.

In addition to Optus’ 5G network, Macquarie will also gain access to other cellular services. Macquarie Telecom claims it wants to “expand its mobile business and hire more staff over the next three years.”

As reported by IT News, Macquarie Telecom group executive Luke Clifton said:

2020 changed the way Australians work forever.

By providing 5G connectivity along with business grade NBN, we can ensure Australian businesses can work from more places than ever before.

Optus was the clear choice in terms of superior technology, flexibility to build the right solutions, and cooperation. It is leading Australia’s wholesale 5G market, offers incredibly fast 5G and continues to invest heavily in its 5G network.

The company did not disclose how long the deal would be in effect, other than to say it was “multi-year”.

Aussie Broadband Ltd (ASX: ABB) also made the switch last month from the Telstra to Optus mobile network.

What does the company do?

Macquarie Telecom is a business-to-business endeavour operating through two segments, namely its telecom and hosting segments.

The telecom segment relates to the provision of voice and mobile telecommunications services and the provision of services utilising the Macquarie Telecom data network. The hosting segment is focused on providing services utilising the company’s data hosting facilities. Macquarie generates the majority of its revenue from the telecom segment.

Macquarie Telecom share price snapshot

Despite today’s losses, the Macquarie Telecom share price has been on an upward trajectory over the past twelve months. In the midst of the COVID-19 sell-off, Macquarie Telecom shares reached a 52-week low of $19.20.

If you had bought shares exactly one year ago, you would now be sitting on a healthy return of over 90%. However, year to date, the company’s shares have fallen by nearly 10%.

Based on the current share price, Macquarie Telecom has a market capitalisation of around $1 billion.

More reading

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• Macquarie Telecom (ASX:MAQ) share price on watch with more growth in HY21
• Why is the Telstra (ASX:TLS) share price falling today?
• ASX investors watch out for a rise in interest rates in 2022

Motley Fool contributor Marc Sidarous has no position in any of the shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Aussie Broadband Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Ltd (ASX: CSL) share price seems to be stuck in the doldrums over the last couple of weeks. Shares in the biotherapeutics giant have been on the decline since the company announced its half-year results 2 weeks ago.

Interestingly, CSL reported a significant 45% increase in its net profit after tax. So why is the share price falling? As always, the devil is in the details.

Dividends cut in Aussie dollar terms

No, it’s not CSL picking favourites between the United States and Australia. Due to CSL’s operations being heavily focused in the US, most of the company’s financials are shown in US dollar terms. This causes fluctuations when interchanging between multiple currencies.

In this case, CSL declared a dividend increase of 9% to US$1.09 per share. However, the Australian dollar has strengthened by 17% compared to the USD in the last year. That means the Australian equivalent is actually less. In fact, CSL would have had to increase its dividend by more than 17% for it to increase on last year’s payout for Aussies.

Yesterday’s GDP figures indicate that the currency issue could worsen. Australia’s economy is rebounding strongly, backed up by the surprising 3.1% of GDP growth for the last quarter. The CSL share price also tumbled 1% yesterday.

The disappointing dividend for Australian shareholders is likely in focus today as CSL’s shares go ex-dividend. Meaning, if shareholders wanted to collect this dividend, but don’t want to stick around for the next one, today is the last day they had to wait around for.

CSL COVID-19 vaccine is a straggler

While Pfizer Inc (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) were provisionally approved earlier in the year, the AstraZeneca (LON: AZN) COVID-19 vaccine that CSL is set to manufacturer locally took a bit longer.

Furthermore, as reported by The Australian Financial Review, the AstraZeneca vaccine has lower efficacy than the Pfizer vaccine.

CSL resorted to an agreement for producing the AstraZeneca vaccine. This came after the company abandoned its own development attempts with the University of Queensland. This decision was made after participants gave false positive readings for HIV.

Foggy future weighs on CSL’s share price

Management warned that plasma collections had been impacted due to the challenging environment in its half results. As a result, CSL had experienced additional costs associated with collecting plasma.

Additionally, analysts at Goldman Sachs made the decision to downgrade CSL’s rating to a neutral. Analysts were concerned that management only reaffirmed guidance on the strong profit lift, instead of upgrading. This was interpreted by the analysts as potentially signalling headwinds for the company.

Accounting for today’s move, the CSL share price has now fallen by 16.5% in the last 12 months. 

More reading

• Why are these ASX 200 healthcare shares sinking today?
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• 5 things to watch on the ASX 200 on Thursday
• Is it time to buy these 2 hot ASX healthcare shares?
• What you need to know about the CSL (ASX:CSL) dividend

Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Argosy Minerals Limited (ASX: AGY) share price is losing ground today. This comes despite the company updating the market with its expansion development plans for the Rincon Lithium Project.

During late afternoon trade, the lithium miner’s shares are down 4.5%, trading at 10.5 cents.

Argosy Minerals is a mining and exploration company with a 77.5% interest in the Rincon Lithium Project in Salta Province, Argentina. The company also operates the Tonopah Lithium Project in Nevada, USA.

What did Argosy announce?

The Argosy share price is in the red today regardless of its positive update to investors.

In its release, Argosy advised that it has conducted preliminary works to start drilling operations at the Rincon Project. The program will seek to increase the current Joint Ore Reserves Committee (JORC) indicated mineral resource estimate conducted in 2018.

The company believes that there is between 262,000 tonnes to 479,000 tonnes of lithium carbonate underground. This is based on an average grade of 315 milligrams and 327 milligrams per litre, from 102.5 metres and 300 metres below the surface.

Argosy will diamond drill 6 holes to a depth of 300 metres and another drill hole up to 150 metres. Detailed geological logging will follow with the collection of samples sent to a laboratory for analysis.

Should the results yield an increased resource estimate, this could extend the project mine life and boost future production capacity.

Words from the managing director

Argosy managing director Jerko Zuvela commented:

We are excited with the increasing development activities occurring at the Rincon Lithium Project and look forward to an exciting near-term growth phase.

We expect the drilling results will outline the substantial upside that exists below the shallow- depth current JORC Indicated Mineral Resource estimate and provide further support for our planned 10,000tpa commercial scale development at Rincon.

Argosy share price review

Over the past 12 months, the Argosy share price has climbed almost 80%, with a 31% increase year-to-date. The company’s shares are performing relatively well in 2021 due to renewed investor confidence in the lithium market space.

Based on the current share price, Argosy commands a market capitalisation of more than $137 million.

More reading

• The Argosy (ASX:AGY) share price is racing 9% higher. Here’s why.
• Argosy (ASX:AGY) share price plummets 7% despite positive update
• Why the Argosy (ASX:AGY) share price is shooting 7% higher today
• Why Argosy Minerals, Sigma, Vocus, & Zip shares are charging higher

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Rewind the clock a year, and ASX growth star Altium Limited (ASX: ALU) was the talk of the town. As one of the A’s in the exclusive WAAAX club of ASX growth shares, Altium could seemingly do no wrong. On Valentine’s Day 2020 (14 February for those less-romantically minded), Altium peaked at a share price of $41.82. That price represented a gain of more than 50% over the preceding 12 months and more than 600% since March 2016.

But it hasn’t been an easy ride for investors since. From 14 February 2020 until today, Altium shares have lost around 38% of their value. The current share price is $25.97 at the time of writing. In fact, you can buy Altium shares right now for not too dissimilar a price from where you could during the worst throes of the coronavirus market crash last year. That’s a similar price in turn to what you could have gotten back in August 2018. That’s a while ago now.

An ASX dividend growth star is born

But until 2020, one aspect of Altium’s success story remained in-tact — it’s status as a dividend growth star. Unlike fellow WAAAXers Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), Altium pays a dividend and has done so uninterruptedly since October 2012.

In 2013, Altium’s dividend came in at an annual payout of 11 US cents per share. This was increased every year until 2020 when the company paid an interim dividend of 20 US cents per share, and a final dividend of 19 cents per share for a total of 39 US cents per share. That represents a compounded annual growth rate (CAGR) of 19.82% over those 7 years, exactly what a dividend growth investor would like to see.

However, 2021 tells a different story. Altium reported its half-year earnings last month, and dividend growth investors would have got a shock. Altium announced an interim dividend of 19 US cents per share, which is a 5% drop on the previous year’s interim dividend of US 20 cents per share. Altium’s dividend growth streak has, sadly, come to an end.

If the shock of this move has died down for you, it’s worth remembering that Altium has never made any commitment to doling out ever-increasing dividends for its shareholders. Rather, it’s official dividend policy is to “aim to pay ordinary dividends each year within the range of 50-80% of net profit”.

In that same earnings report where Altium delivered the bad news, the company reported a net profit after tax of US$16.6 million, which was a 12% drop from the prior corresponding period. Since profits dropped, it makes total sense that the dividends would also drop under this policy.

Will Altium return to dividend growth?

Logically, for Altium to return to dividend growth, it’s profits must lead the way. Luckily for investors, the company’s management seems confident this will be the case. Altium CEO Aram Mirkazemi stated in the earnings report that, “I am confident of a much stronger second half. Early signs are positive for this”.

No doubt that any dividend growth investors who hold Altium shares are keeping their fingers crossed that Mr. Mirkazemi is right.

More reading

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• 2 stellar ASX tech shares to buy in March
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Red 5 Ltd (ASX: RED) share price is on the move, up 6% in afternoon trading after earlier being up more than 11%.

This follows a company update on the ASX gold miner’s King of the Hills project.

What milestones did Red 5 report?

The Red 5 share price is lifting after the company reported it has cleared a key legislative hurdle and moved forward with an engineering contract at its King of the Hills gold mine in Western Australia.

On the legislative side, the company reported that the Department of Mines, Industry Regulation and Safety has approved its mining proposal for King of the Hills. This paves the way for Red 5 to recommence mining at the gold mine in 2022. The first gold production is forecast for the June 2022 quarter.

Red 5 also reported it has approved Phase 2 of its engineering, procurement & construction contract. Maca Ltd (ASX: MLD), Red 5’s engineering and construction contractor, is now expected to speed up the deployment of its crew over the next months. According to the company, the Phase 2 project is $10 million under budget.

The company said it was finalising the debt financing for King of the Hills with a Tier-1 banking syndicate. It expects that to be complete in the March 2021 quarter.

Commenting on the achievements, Red 5’s managing director Mark Williams said:

With all major mining approvals now in place and the debt funding process on track for completion this quarter, Red 5 has approved Phase 2 of the EPC contract. This will allow MACA Interquip to ramp-up the mobilisation of their construction teams over the coming months.

The manufacture and delivery to Australia of all key long-lead items for the plant is also well on track, which will help to ensure that key construction and installation milestones can be achieved once construction of the plant moves into full swing in the second half of this year.

Red 5 share price snapshot

It hasn’t been an easy 12 months for Red 5 shareholders, with shares down 42% since this time last year. In comparison, the All Ordinaries Index (ASX: XAO) is up 9% over that same time.

Year-to-date, the Red 5 share price is down 31%.

More reading

• Is Altium’s (ASX:ALU) dividend growth star fading?
• Cleanaway (ASX:CWY) share price swept up in >$2bn acquisition rumour
• Why the ResApp (ASX:RAP) share price is sinking 5% today
• Meet Sharesies, the ASX’s newest brokering app
• Why is everyone so bad at selling shares?

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Red 5 (ASX:RED) share price is lifting 6% today appeared first on The Motley Fool Australia.

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The Cleanaway Waste Management Ltd (ASX: CWY) share price isn’t reacting much to rumours that it’s about to acquire its largest rival.

Shares in the waste management group dipped 1.3% to $2.21 in after lunch trade as the S&P/ASX 200 Index (Index:^AXJO) gave up a similar amount.

Investors don’t seem to be impressed with speculation that it is closing in on a deal to buy the Australian arm of France’s Suez SA (FRA: SZ1).

$2bn plus takeover spooks the Cleanaway share price

The Australian Financial Review quoted unnamed sources who claim that talks between the two parties were “advanced”.

If a takeover offer eventuates, Cleanaway may need to cough up something north of $2 billion.

Little wonder that shareholders are dumping their shares as Cleanaway will probably need to undertake a sizable capital raising to fund the acquisition.

High risk, high rewards

ASX shares tend to come under pressure at the slightest whiff of a cap raise. This is because companies usually have to sell new shares at a discount to the market to attract fresh capital.

But Cleanaway has another issue if this large acquisition goes through. It will need to bed down the new business without its chief executive Vik Bansal.

Swallowing a large acquisition is challenging even in the best of times. The task will be much more complicated without the captain at the helm.

Chairman Mark Chellew is taking over the reins from Bansal, but he is only the acting captain. Cleanaway is asking would-be capital raising investors to stomach a lot of risk, and they will be wary of the general fact that most acquisitions fail to deliver value.

Cleanaway enters ugly takeover battle front

If walking this tightrope isn’t precarious enough, Cleanaway may be entering into an ugly love/hate triangle.

Suez is fighting off a hostile €11.3 billion ($17.5 billion) takeover bid from fellow French rival Veolia Environnement SA (EPA: VIE). Veolia wants all of Suez, even its Aussie operations, and is threatening legal action to stop Suez from offloading assets.

Then there is the question of whether the Australian Competition & Consumer Commission (ACCC) would bless the marriage between Cleanaway and Suez Australia. The two are major players in the local market.

Foolish takeaway

The AFR reported that Cleanaway controls around 22.7% of Austraila’s waste treatment and disposal services market. Suez’s local arm is the next biggest with 18.3%, according to IBISWorld data.

But if Cleanaway can pull it off, its total revenue and earnings could jump by as much as 50%.

Talk about high stakes poker! Let’s hope Cleanaway shareholders will leave the party with more than the shirts on their back.

More reading

• Cleanaway (ASX:CWY) share price torn between record results and leadership uncertainty

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ResApp Health Ltd (ASX: RAP) share price is sinking today. This comes after the company announced that Medgate had started European trails for ResAppDx, its smartphone-based acute respiratory diagnostic test.

At the time of writing, the digital health company’s shares are down 6.78%, trading at 5.5 cents.

First, a quick take on Medgate

Founded in 1999, Medgate provides telehealth services, bringing physicians to patients where needed via digital health bookings.

The company operates Europe’s largest telemedical centre in Switzerland and employs more than 500 people worldwide. Medgate has a presence in Germany, the Philippines, the United Arab Emirates, and India.

Why is the ResApp share price moving?

In today’s release, ResApp advised that Medgate has begun a 3-month pilot trial of ResAppDx through its telemedicine services in Switzerland. This follows a joint development and pilot agreement the companies signed in November last year.

During the initial phase of the partnership, both companies conducted detailed technical reviews on the ResAppDx technology. This included creating roadmaps for patients with respiratory disease symptoms, usability testing, automated processes, and training material development.

The companies will jointly evaluate the ResAppDx platform rollout across Medigate’s telehealth service. Several key metrics will be applied as a benchmark to test its success.

They will finalise negotiations on the cost model of the integration once ResAppDx passes the pilot trial.

Management commentary

ResApp CEO and managing director, Dr Tony Keating, commented:

…We are very confident that ResAppDx will provide considerable benefits for Medgate patients, physicians and insurers.

Medgate has made a strong commitment to ResApp and both parties remain confident of a successful pilot trial. The company has already significantly benefitted from Medgate’s knowledge and insights into telehealth best practice, and we look forward to continuing this work into the future.

Medgate CEO, Dr Andy Fisher, added:

We are absolutely convinced that the use of new technologies like ResAppDx will enable an advancement of our Digital Health platform. This will benefit our patients by enabling them to be treated conclusively by phone or video in even more cases.

ResApp share price review

The ResApp share price has been a weak performer over the past 12 months, declining more than 65%. The company’s shares hit a multi-year low of 5.2 cents last month and are within striking distance today, at 5.5 cents.

More reading

• Why the ResApp (ASX:RAP) share price opened 10% higher today
• Here’s why the Resapp (ASX:RAP) share price closed 5% lower
• Why the ResApp (ASX:RAP) share price is climbing higher

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was only back in September last year that we reported that a new brokering app called Superhero was about to take the ASX by storm.

By offering a market-leading $5 brokerage on all trades, Superhero was an exciting development for many ASX investors. Indeed, this was made especially so by the co-involvement of Afterpay Ltd (ASX: APT) co-founder Nick Molnar. In addition to Zip Co Ltd‘s (ASX: Z1P) Larry Diamond.

Compared to the ‘old-guard’ of ASX brokers like Commonwealth Bank of Australia‘s (ASX: CBA) CommSec, Superhero was certainly something different. So much so that some commentators dubbed it ‘the Australian Robinhood’. Robinhood is the uber-popular US brokering app beloved by millennials in particular.

But today, we get to report on another entry to the ASX brokering market.

Enter Sharesies

According to reporting in The Sydney Morning Herald (SMH) this morning, the New Zealand-based share trading platform Sharesies is “set to come on board” for ASX trading this month. Sharesies has been available for Kiwi investors since 2017. It offers trading in the New York Stock Exchange. Additionally, it also offers trading in the Nasdaq and the New Zealand Stock Exchange (yes, that’s a thing). It reportedly has 320,000 existing customers and $1 billion in funds under management. Co-founder Brooke Roberts states it “will be the first platform on the ASX to offer trades from as low as 1 cent”.

It will also differ from existing low-cost brokers like Superhero and the US shares-only Stake. Due to its “focus on financial literacy and education”.

Here’s some of what Ms. Roberts told the SMH about Sharesies:

What we’ve built Sharesies for is to enable people to build a portfolio with amounts they can afford and that’s what we always go back to… It’s not a get-rich-quick scheme, it’s not timing the market, it’s about time in the market… We just use everyday language, and we’ve really worked on creating a platform that feels accessible for everyone and means that people do become investors and feel like they can start growing their wealth.

How will this broker make money?

The SMH report doesn’t go into how Sharesies actually makes money. One wouldn’t think it would make a killing from 1 cent brokerage. But according to Sharesies’ New Zealand website, the platform is run using a subscription system as well. In New Zealand (the prices might differ for Australians), there are 2 ways you pay. For those with a portfolio value of between NZ$50 and NZ$3,000, there is a NZ$1.50 a month subscription fee. It’s NZ$3 a month for portfolios over NZ$3,000 and free for portfolios with NZ$0-50.

In addition, Sharesies also hits each transaction with a fee (pretty much brokerage). This is charged at 0.5% for orders up to NZ$3,000, and at 0.1% for orders over NZ$3,000. For New Zealanders who trade on the US market, a currency exchange fee of 0.4% is also charged on cash moving between the two currencies.

We don’t yet know the pricing for ASX shares since the product hasn’t launched yet. But one would expect it won’t be radically different from this model. Watch this space!

More reading

• What do big brokers think about the Afterpay (ASX:APT) share price this week?
• Why are ASX tech shares like Afterpay (ASX:APT) so volatile?
• The Flexiroam (ASX: FRX) share price rockets 35% after new announcement
• Here’s why brokers like these 2 small cap ASX tech shares
• 5 things to watch on the ASX 200 on Wednesday

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The majority of stock advice articles we read are about which shares we should or shouldn’t buy.

But selling is just as critical, since that’s when losses or gains are actually realised.

“Selling is as important to investing as braking is to driving,” Lumenary managing director Lawrence Lam posted on Livewire.

“Yet all too often, investors only know the accelerator and gloss over the analytical framework of selling. In doing so, they give up much of the hard work they have put in to establish the buy thesis.”

Lam added that selling is a difficult art that even professional investors are clumsy at.

He cited a recent University of Chicago study that showed poor selling was killing performance among institutional investors.

“So bad were the selling decisions they even failed to beat a random selling strategy,” said Lam.

“These weren’t retail investors. The study looked at portfolio managers with an average US$600 million size. The outcome? They still failed to outperform a simple randomised strategy.”

Why is everyone so bad at selling?

The reason is that humans use what are called “heuristics” to make decisions.

These are mental shortcuts that allow us to function in a world that demands complex choices be made each and every day.

The result is that we can make decisions faster and with less stress, but the solution is not necessarily optimal.

Usually, this serves us well — like when deciding which breakfast cereal to have in the morning.

But for an activity that requires complicated analysis like deciding which shares to sell and when, heuristics can cause poor outcomes.

Lam quotes three common heuristics that cause investors to dispose of their shares poorly:

1. Disposition effect: “a reluctance towards selling losers, and inclination to selling winners”
2. Overconfidence: “assuming you will make the right decision to sell without any factual analysis”
3. Narrow bracketing: “looking at decisions in isolation without consideration for the broader picture”

Lam said these cognitive biases can cause one of two outcomes.

“First, you can sell out of a great company too early,” he said.

“Second, a weakness in your selling process can lead to prolonging a losing investment far too long. Our cognitive biases can shroud our judgement. We can become committed to a previous decision and fail to see how changing circumstances no longer make an investment worthy of our portfolios.”

Easier said than done

Times of market crashes are especially hard on our ability to think clearly about selling shares.

Instead of judging a business on its merits, investors become price-reactionary, according to Lam.

“When you’re facing a 30 to 40% drop in prices, the stomach will take over the mind. Stress sets in, sometimes even panic,” he said.

“Heuristics invade the decision-making process when time is pressured. Evidence points to the most severe underperformance on sales coming after extreme price movements.”

Professionals are actually more susceptible to rash sell-offs during market corrections, as they have to regularly report back performance to their clients.

“They tend to use stop-losses, automatic rebalancing to benchmark weighting, and auto profit-taking triggers to simplify sell decisions.”

Lam said selling a share must always be on the basis of changes in a company’s prospects.

More reading

• The Thomson Resources (ASX:TMZ) share price crashes 10%
• Why is the BlackEarth Minerals (ASX:BEM) share price soaring 33%?
• 2 stellar ASX tech shares to buy in March
• What’s up with the oil price right now?
• 2 impressive ASX shares to buy in March 2021

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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After starting the day with a healthy 6.4% boost in early trade, the Thomson Resources Ltd (ASX: TMZ) share price has taken a turn for the worse this afternoon.

Shares in the mineral extraction company have plummeted from an intraday high of 16.5 cents apiece to 14.0 cents at the time of writing, down almost 10%.

The miner has made 2 announcements, yesterday and today, after coming out of a trading halt.

Let’s take a closer look at what’s driving the Thomson Resources share price today.

Project update

In yesterday’s announcement, Thomson Resources updated the market on the status of its projects in New South Wales.

The minerals extraction company declared its maiden drilling program at the Mallee Hen gold prospect in the Lachlan Fold Belt, NSW, was complete.

The mining company drilled 7 holes at the site, including one abandoned when the company struck a large cavern. The company claimed to have passed “several intervals of strong quartz veining” during the drilling process.

Thomson will now move the drill rig from Mallee Hen to its Bygoo tin project with the hope of discovering more tin depositories at the site. The company will move the rig to its Bald Hill tin prospect from there.

Silver mining

Today’s ASX announcement concerns a silver mining site in Texas, Queensland.

Thomson advised it has entered into a binding agreement with liquidators overseeing the dissolution of MRV Metals Ltd to buy a site 8km east of Texas near the NSW border.

The already existing mine site is located in the Silver Spur Basin of southern Queensland in the New England Fold Belt.

Commenting on the acquisition, Thomson Resources chair David Williams said:

I am very pleased we have been successful in our tender for the Texas Silver Project in Southern Queensland. This provides a key piece for our implementation of the Fold Belt Hub and Spoke Strategy.

Not only will it provide Thomson with an ideal location for a central processing facility that we envisage, but it will also bring the additional resources which will take us close to our goal of having at least 100 million ounces of silver equivalent resources available at the facility if required.

The Texas project also brings considerable exploration potential for silver, and also gold, zinc, lead and copper.

Thomson Resources share price snapshot

Thomson Resources share price has been on the up over the past year. If an investor bought shares in the company a year ago, they would be sitting on a mouth-watering 625% return on investment.

The company has a market capitalisation of $51.3 million.

More reading

• The Thomson (ASX:TMZ) share price jumped 9% higher today after its latest announcement

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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