Wondering if you could comment on Imperial Metals Corporation? This is an interesting stock sitting at almost a 5 year low as a result of the tailings dam breach at one of its mine sites. Your technical insights would be much appreciated.
Thanks for the assignment. Investors in Imperial Metals Corporation (III TSX) saw their wealth drop in a flash on the news of the tailing pond failure at the Mount Polley mine. The breach has resulted in the loss of production and cash flow from a primary corporate asset for an indeterminate time period. In addition the company is incurring costs for rehabilitation and restoration arising from the breach. Other factors in play with III is that copper prices have been in decline as have those for gold and silver.
The company has the majority of its operation in British Columbia and when the construction and commissioning of the Red Chris mine is complete they will have three operating mines in the province assuming that the situation at Mount Polley can be resolved. III also owns the Sterling gold mine in Nevada.
For those who seek to walk in the shadow of giants you will be interested to know that billionaire Murray Edwards got involved with the company in the mid 1990′s and owns 36% of the stock.
An examination of the charts will add technical elements to your evaluation of the opportunities that may arise from this stock.
The three-year chart depicts the significant gap down on the news of the dam breach at Mount Polley in early August of 2014. Since then the stock has met resistance at $10.00 and has been trading in a range with support at $8.00. The best case scenario is that III continues to trade in this range as management pushes to resolve the issues at Mount Polley and get the mine back into production.
The six-month chart provides a close up of the buy signals generated by the MACD and the RSI in October and December as the stock tested support near $8.00. What is also noticeable is the resistance at $10.00 that has held three times since September. The best way to manage this stock is to trade it for profit in the range until the stock either breaks out or breaks down.
Make it a profitable day and happy capitalism!