Yukon-Nevada Gold Corp moving sideways

Jun 18th, 2010 – Comment

On a fundamental basis YNG has yet to produce enough gold to generate a profit and as a results will have to continue to issue shares to fund its programs. Selling shares at $0.275 is certainly not the price that management wanted but its what the market was willing to pay.


About the Author

Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


Read the author's full profile.


Further Research

Read more about Precious Metals.


YUKONNEVADALOGO

 

Hi Lou

I have a large holding in Yukon Nevada Gold, YNG-T. Could you be kind enough to give me your point of view on this company?

Arthur

 

Hi Arthur,

Yukon – Nevada Gold Corp. ( YNG TSX) is a small cap gold producer which by definition implies greater risk. YNG recently closed a private placement of flow- through shares to fund further development of their deposits. I am not sure what induced you to load up on this stock but lets study the charts to see what factors are in play.

 

 

yng

The three year chart provides a view of the support that the stock has enjoyed in the $0.24 range since October of 2009. It has twice breached $0.24 and dipped to $0.20 where it caught a bounce and scrambled back to $0.24.

 

 

 

 yng2

 The six month chart illustrates the support at $0.24 and the resistance at $0.25 and again at $028. The MACD signaled the bounce off of $0.20 and retreat from $0.28.

 

At this point it appears that the YNG is building a base and will be dependent on a couple of factors to take it higher. On the macro side the price of gold will no doubt help lift all the boats and has over the last couple of weeks as it set new highs closing over $1,250.00. The other thing to consider is that the company raised money to improve their understanding of the deposits that they control and will be actively drilling its priority targets. As the results of those activities are announced it will provide fuel for the fire.

On a fundamental basis YNG has yet to produce enough gold to generate a profit and as a results will have to continue to issue shares to fund its programs. Selling shares at $0.275 is certainly not the price that management wanted but its what the market was willing to pay.

In summary its a small cap gold producer which implies greater risk. The chart indicates that YNG is building a reasonable base and as has been noted in previous reports, the bigger the base the better the case for an investment.

MAKE IT A HUGE FATHER’S DAY AND HAPPY CAPITALISM.

Categories: Precious Metals
Content © Relentless Economics - Charts courtesy Stockcharts.com - Employees Entrance - Optimization Media