MELBOURNE AUSTRALIA 6 February 2007 - "(The Company) is not aware of any information that has not been announced that would explain the recent trading in the securities of the Company."
Who said that? Sounds familiar. Just can't quite place it. Well, we can really. Black Range Minerals Limited (ASX: BLR) was on the move again yesterday. We are a bit nervous about mentioning it, given the pasting we copped last week for daring to suggest that there could be something fishy in wind.
But, your intrepid correspondent knows no bounds when it comes to this sort of thing so it's worth another crack.
Following Black Range Minerals' meteoric - almost - 29% rise in one day, on what appeared to be little information, we suggested that a rather predictable chain of events could occur during the following few weeks.
The first in that chain could very well have happened yesterday when the Australian Securities Exchange demanded to know if the company had any knowledge of the reasons behind the company's share price movement which gained as much as 50% before being suspended.
Even at the close, following resumption of trading, it was still up by over 10%.
Now apparently one of the reasons behind the previous 29% price spike - so your correspondent was told in no uncertain terms - was that Melbourne stock broking firm Intersuisse had issued a BUY recommendation on the stock.
That would have been fair enough if it wasn't for the fact that the 29% rise happened on Thursday 25th January, yet Intersuisse's research report was released on the 22nd January. In fact on the two days following the release of the Intersuisse research report volumes traded in Black Range Minerals halved from 10 million on the day of the report to 5 million two days later.
The other reason given was that on the 17th January the company had released updates to its Taylor Ranch Uranium [PDF] project. Again we are happy to accept that as the reason, only that the share price remained in a deep sleep from that point up until the 25th January when it finally burst from the box.
So, having seen the first and second act play out - sudden price movement followed by swift denials about any knowledge about anything - we await with our box of popcorn for the all important third act where the company releases previously unknown information that will send the stock not just to the Moon but instead to Mars.
Conversely, we could be entirely wrong. But if the bullish comments from some of the shareholders we've seen are anything to go by it could be a fun ride.
Of course there may have been some news somewhere that caused Black Range Minerals’ price to surge, so maybe we just missed it. We are sure eagle eyed Reckoners will put your correspondent in his place if we have.
We briefly mentioned yesterday the prospect of Macquarie Bank Limited (ASX: MBL) diversifying its funds business into the agricultural sector. Say what you like about Macquarie, and we usually do, they are certainly not afraid to have a crack at something new. And, dare we say it, something which has a level of risk attached to it.
After all, for Macquarie to be considering an investment in the agricultural sector during a lengthy drought is a ballsy move. But then, is it better to be a buyer when everyone else is buying, or when everyone else is selling? Macquarie are taking the latter view.
But there are risks. As Access Economics perhaps obviously point out, "Were it not for the drought then the agricultural sector would be ready for another burst of investment spending."
The report said, "Farmers have proven to be quite forward thinking in recent years, keeping up their investment spending, even when weather conditions have turned for the worse."
How much longer can that last for? The vultures are circling, and in this case there are wearing the pin striped suits of a Macquarie investment banker.
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About the Author
Kris Sayce began his financial career in the City of London as a broker specializing in small cap stocks listed on London's Alternative Investment Market (AIM). At one of Australia's leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.
Comment by John Wright on 7 February 2007:
In regards to BLR...
Well, a bit of a turn around.
I can handle skepticism. Congrats, on a balanced article...skeptical, but better informed.
Your article today is much more thought provoking, than wrong as was your last (through missed information).
I hope my email pointed you in the right direction.
Now another couple of points for BLR I dont think you mentioned...Ferris-Haggerty copper mine, option to aquire 90% rights, and they are seeking to aquire more acerage (dont know where or what though).
47% of sharers are held in top 20...and only 109 million options (estimate 1/2 in top 20)
If you would like a detailed run-down on them I am able to write one for you....just email above addy.
I do wonder how much money, through lost profits, your readers lost ?...think potential...it is the key to identifying performers early and maximising profits.
Your article gave me the chance to sell, and rebuy at a cheaper price....well not your article actually...it was the speeding ticket....but you seem to love compliments...you give yourself enough.
Please, less chest beating. You hae done nothing to the share price...and this pull back is good for the longevity of the share price.
30 cents +, by end of February....February 2007 that is.
Bit of humor...please don't take this the wrong way.
Regards.
JCW