Sandstorm Metals and Energy Ltd (CVE:SND) (PINK:STTYF) attracted a massive trading volume on Friday as their price reached for another 52-week low.
This time, however, it bounced support at 32.5 cents per share, which resulted in a small gap up on Tuesday. Sandstorm's stock gained 4.5% during the last trading session, but the resistance around 35 cents still held.
The price was shaken up by huge volatility on Friday, which means bears didn't win this battle easily and there was a significant bullish interest as well, leaving a long upper shadow on the daily candle. It is very likely that the bearish mood will continues to dominate SND stock since the price did get below the important support of 35 cents with easy and only now the bulls began struggling at least for consolidation.
The latest news still affecting the share price action was issued on December 22. The company updated shareholders on the amendments made to the original coal purchase agreement with Royal Coal Corp. (CVE:RDA). A year old agreement allows Sandstorm to purchase 18% of the first six million tons of coal produced from the Big Branch Mine paying $55 per ton. The amendment deferred a portion of coal required to be delivered, allowing an extension to December 31, 2012.
Sandstorm invested $3 million through a bridge loan financing into Royal Coal and repayments should start as of January 2012 at $375 thousand per month.
Sandstorm also holds a 2.7% gross revenue royalty on the Big Branch Mine.