Legacy Iron Ore Share Price Continues to Soar (ASX:LCY)
The share price of Perth-based exploration company Legacy Iron Ore Ltd [ASX:LCY] has been on a soaring trajectory this week, rising ~455% since Monday.
LCY Shares raced out of the blocks on Monday, breaking the one-cent mark for the first time since 2016, though there has been no price-sensitive news released by the company.
This makes it difficult to tell whether the market is reacting to its gold operation or iron ore operations — or both.
At the time of writing, LCY shares are up a further 22.5% to trade at 4.9 cents per share.
What’s going on with the Legacy Iron Ore share price?
Through Monday and Tuesday, we saw the share price double each day, with momentum slowing down today.
LCY responded to the abnormal share price action on Monday, saying it was not aware of any information that could explain the recent rise in price.
This has obviously led to a fair amount of speculation from investors.
LCY’s last update related to metallurgical test work results from its Mt Celia gold project, with testing expected to be done by the end of this year, with reporting soon after.
Perhaps some investors jumped the gun, prompting others to pile in amid the rising share price.
LCY also said it expects to announce a resource upgrade from the project in late December or by mid-January, though this is subject to the workload of its consultants.
This could explain why some investors jumped in early.
And more fuel has been added to the fire today.
This morning, LCY said a drill rig has arrived on site at its Yilgangi gold deposit at Mt Celia, with drilling to commence today.
Ordinarily, this kind of news wouldn’t be expected to move the share price, but it seems LCY shares are attracting their fair share of speculators at the moment.
Is Legacy Iron Ore a buy?
I covered some of LCY’s prospects in an article published earlier this month. If you’re interested, you can give it a read here.
In my opinion, I’d be wary of the current share price, as it could leave LCY massively overvalued.
Shares haven’t risen on any tangible news, which can be a bit worrying, but such is the nature of speculative gold stocks.
With a resource upgrade expected in the next few weeks, along with more metallurgical results, we’ll be in a much better position to assess LCY’s value then.
If you’re interested in learning about gold and why it can be a great investment, we have several great resources here at The Daily Reckoning Australia:
- Guide to Buying Gold
- Discover what is probably the easiest way to start investing in gold in Australia here
- Why Australia is set to become the next ‘gold epicentre’
For The Daily Reckoning Australia