LOGIN
FREE REPORT
REQUEST WALKTHROUGH
search
times
New call-to-action

Tags

See all

Articles

VMC

Why Venus Metals Is Down 13.6% Today?

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

Venus Metals (ASX: VMC) is a mining company that has recently taken legal action against a competitor, Spectrum Metals (ASX: SPX), in the West Australian Supreme Court. The company issuing its rival with regard to their conduct in acquiring the Penny West Gold project, accusing them of breach of fiduciary duty, breach of confidence and misuse of confidential information.

The company expressed confidence in their prospects following the litigation, which resulted in the company’s share price soaring 45% on the day when it peaked. This is despite the company not knowing the extent of the damages they could potentially claim. Since it is a civil action, the case will be decided on the balance of probabilities, which significantly lowers the bar required to win.

VenusMetals - report
Operations of Venue Metals (Credit: Venus Metals Corp)

Spectrum however wholly denied the claims today and said that they would vigorously defend themselves in court. The statement was quire strongly worded, with Spectrum saying that they would attempt to expedite the proceedings. This is unlikely if Spectrum believed that the proceedings were likely to go against them, so investors in Venus tempered their optimism around a large payout. Additionally, since Spectrum is going to continue their exploration project while the case is being decided, they are committing more funds that they are likely to lose if they are wrong.

Venus Metals mines gold, lithium, iron, cobalt and Nickel. The business is a pre-earnings, exploration phase mining company, with very little revenue. This is not necessarily a bad thing since the business is working on finding an attractive mine site and commercialising it, which could deliver great returns if successful. Nevertheless, the high failure rate in exploration projects means that investors should view the opportunity with some degree of caution and analyse it carefully before deciding to invest.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

New call-to-action
New call-to-action

Company Articles

Looking for more Stock Recommendations?

Fill in your details to receive our special report: Top 3 Income Stock Recommendations for 2020.