Gediminas Jasionis
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Is $1 PPS Too Much for Silvermex Resources Inc. (TSE:SLX) (PINK:GGCRF)?

by Gediminas Jasionis Feb 23, 2011
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7slx_chart.pngSilvermex Resources Inc. (TSE:SLX) (PINK:GGCRF) share price touched the resistance at $1, but closed below the major trendline, making a precedent for a trend reversal.

Trading volume was 2.5 times the 90-day average, but it was not enough to cover a push through the area where many traders are selling in anticipation of reversal. A similar example of reversal was set in December, when the price took a dive after hitting $1.06.

Of course, the stock is following the general direction of silver and gold prices, so a continuous appreciation in the values of these precious metals can force Silvermex to hit a new 52-week high as well. Many influential opinion leaders are currently in favor of continued rise in precious metal prices.

Silvermex plans to improve the producing La Guitarra silver-gold mine in 2011, and has allocated $13.4 million to upgrade the equipment and infrastructure. Optimal production levels should be achieved by Q4 this year.

44silvermex_logo.jpgAnnual financial report, which should be filed by the end of March, should stabilize the share price in higher levels. The company has already disclosed to have entered 2011 with more than $26 million in working capital and increasing production. Confirmation in audited numbers would create a base for the current value, but the further increase will depend on the increase rate of production levels.

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