Gediminas Jasionis
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Northern Freegold Resources Ltd. (CVE:NFR) (PINK:NFRGF) Price Action Remains Volatile

by Gediminas Jasionis Jan 24, 2012
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nfr_chart.pngNorthern Freegold Resources Ltd. (CVE:NFR) (PINK:NFRGF) lost 12.1% on Monday, falling lower after its recent price run expired.

NFR still trades with a 48.7% premium after it went up, reacting to the company's announcement of the NI 43-101 compliant resource estimate last Wednesday.

The news said that their Freegold Mountain Project in Yukon contains 1.1 million ounces of gold, 10.2 million ounces of silver, 287 million pounds of copper and 90 million pounds of molybdenum.

The average mineralization grades are not very spectacular and that of gold even falls below the gold equivalent cut-off grade of 0.5 g/t. A summarized calculation states that the property hosts 3.7 million gold equivalent ounces at 1.1 g/t .

norther_freegold_logo.jpgThe newest calculations significantly expanded the projects resource base. However, the grades found could be of little use if they fall below cut-off, meaning the resources can't be recovered profitably.

The market's reaction was controversial, and it seems most traders just used this news update for some easy profits. The volatility remained very high over the past four sessions, however, it has undoubtedly favoured bulls in general. The bearish weakness seen on Monday put the stock price at a new-found support at its 200-day MA of 29 cents per share. This could prove significant over the coming few sessions.

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