Mart Resources Inc. (CVE:MMT
) (PINK:MAUXF) stock price rallied after the company decided to pay out dividend.
MMT gained 27.6% on Thursday in reaction to the news, which further build up on the previous promising update on resource estimations.
Mart announced that on August 8 a dividend of 10 cents per common share will be paid out to the shareholders of record dated July 23, 2012. Stock price reacted the way it did because dividend payments were never made by Mart and most traders didn't expect to see that.
Mart's board also implemented changes in their dividend policy which now promises to pay quarterly dividends of 5 cents per share starting from September 2012.
The company has sound fundamentals for such a business type so the increase in share price likely won't go away quickly. Still, the stock was listed among the most active ones on the exchange after the big price push, so large scale price changes in either way are possible over the coming few sessions when more traders join the game.
A day earlier, on June 27, Mart published an update of reserve evaluations which included a notable increase in their potential total oil reserves. Proved reserves increased by 24% to 13.9 million barrels, probable were raised 29% to 19.2 mm bbls and possible gained 14% in volume now calculated at 25 mm bbls.
The company's net present value calculated at a 10% discount rate was 927.4 million at the end of March 2012. That's 5.7 times larger than their current book value and around twice the current market cap.