Nikolay Tomov
2 Vote 0

Excellon Resources Inc. (TSE:EXN), (PINK:EXLLF) Is Worth Less Than a Dollar Again

by Nikolay Tomov Feb 25, 2011
Yesterday, the stock of Excellon Resources Inc. (TSE:EXN), (PINK:EXLLF) fell below the psychological barrier of $1 again. It seems that presently EXN is not very attractive for those who bet on the long position. In case you are investor, it would be probably wise to wait for a better time before taking the firm decision to go for buying.

Excellon_-_Chart_n.pngOn the Toronto Stock Exchange (TSE), EXN has been going down for some time. Since New Year, it has lost 28% from its value. Yesterday, the stock moved 5% down, dropping below the important $1 level. At closing, the price was $0.96 per share.

The chart suggests EXN might encounter resistance at $1.04 or $1.08, and find support at $0.87 and $0.85.

The stock is declining, although last Tuesday Excellon reported encouraging production news from the Platosa silver-lead-zinc mine in Mexico. They result from the substantial progress in water inflow control. The actual production is better than the forecast.

This is a very positive announcement that could probably drive the share price up in the future. Only the future will show if this will happen.

Last summer, the company began an intensive grouting program on the property. As known, grout is a construction material used to connect sections of pre-cast concrete, fill voids, and seal joints (like those between tiles). Grout is generally composed of a mixture of water, cement, sand and sometimes fine gravel.

The latest financial statements, however, reveal several negative and maybe worrying trends for Excellon:
  • For the three-month period ended Sep. 30, 2010, revenues have decayed by almost 36% in comparison with the quarter ended Oct. 31, 2010;
  • As at Sep. 30, 2010, Excellon had about $2.87M in cash and equivalents - 39% less than in the end of 2009. At the current cash spending rate, this money will be enough for a little more than a year.
Excellon_-Logo.pngThese financial data might undermine the progress of the shares in the coming days. Still, the corporation has no reasons to panic. Excellon is one of the rare Canadian mining companies, which have reached the production stage and yield revenues. This fact itself is good enough reason for Excellon to stay confident.

Comments (0)

Type the characters that you see in the box (5 characters).

This is a captcha-picture.