Nikolay Tomov
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Zincore Metals Inc. (TSE:ZNC), (PINK:ZCRMF) Accumulated Volume on the Canadian Market

by Nikolay Tomov May 27, 2011
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The stock of Zincore Metals Inc. (TSE:ZNC), (PINK:ZCRMF) enjoyed great demand by investors on the Canadian market yesterday. Nevertheless, the shares remain at their rather modest price levels. On Wednesday, they had fallen to a recent bottom, slipping to a six-month low of $0.375. Meanwhile, the company announced a new financing in an attempt to secure additional funds.

Zincore will try to raise as much as $8M via a brokered private placement. The net proceeds of the offering will be used to fund the development of the company's deposits in Peru. The news, however, did not seem to have impressed investors greatly. The price remained almost unchanged - in the last session, ZNC gained only 1.25%, closing at $0.405.

At least the trading volume was notable. A little more than 1M shares traded beats five times the average turnover. However, such a trading activity is not something extraordinary for the stock. The question is - does the volume spike mark the end of the negative shares' movement over the last months?

Hard to give a positive answer. ZNC has been on the decline for some time now. Since marking its 3-year high of $0.90 in early March, the stock has been constantly going down, losing 54% from its value. Some negative facts might lead to the continuation of this unpleasant trend. Let us mention a few of these:

     1) The decreasing price of zinc over the last two months or so;
    2) Zincore continues to incur significant losses, as it is an exploration company and earns no revenues. The net loss for the first quarter of 2011 was $1.82M - 127% larger than for the corresponding period in 2010;
    3) The company is raising capital through equity financing, which increases stock dilution. The latter has risen by about 37% since the beginning of 2010.

Zincore_Metals_-_Logo.jpgNaturally, a positive scenario in the stock's performance is also possible. There are factors to support it too. A week ago, Zincore festively proclaimed promising assay results from the in-fill drilling program at its Yanque deposit. As the company claims, it continues to intersect higher-grade zinc and lead "that are well above the deposit average."

Currently, Zincore is also carrying out a pre-feasibility study on the Accha Zinc Oxide District project. This is expected to be conducted by the end of 2011. More hot details about Zincore you may get from their latest presentation. On the company's website, you may also learn curious facts about the advantages of zinc as a metal.

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