The following is my theory on the very limited upside in GPR share price over the last two months despite numerous positive announcements, valuations and presentations by the company. Please DYOR if contemplating buying this stock.
There is a very clear trend happening on the release of positive assay results that is stifling any increase in share price.
Lets take for example yesterdays announcement, the Feb 23 Busai announcement indicating a significantly greater resource area than previously known, and the Feb 9 visible gold announcement.
Those 3 days produced volumes of 4.3 million (excluding a 17 million S3 XT transaction), 5.9 million and 7.6 million respectively and in all the cases share price moved only very marginally comparing the close to the day before (up .2, up .1 and down .1c respectively.
My theory after following the trading closely is that there is a seller responsible for a significant proportion of those volumes that is willing to sell at 4.0c and above. Yesterday for example the range was only between 4.0 and 4.1 cents despite lots of buying demand after the announcement that I am sure would have lead to a greater increase in share price in the absence of this seller. On Feb 23 all transactions were at 4.0 cents demonstrating a willing seller while on Feb 9 there was an early move to 4.6 cents on limited volume but it quickly went back down again and by the end of the day and after 7.6 million total volume the price was back at 3.9c. I just don't see any worthwhile profits for same day buyer/sellers.
It's reasonable to then assume with my theory that this seller has been active on other days when share price has closed in on 4.0 cents and possibly may have been responsible for some of the numerous 1 million share sales in the last few months of 2016 which started not longer after the 4.3 cent capital raising.
For me this is why the share price has only moved from low 3's to 4.0 cents despite constant very encouraging news these last two months and a new valuation target of 11 cents released (sophisticated investor).
So let's look at the top 20 back on December 5, 2016.
http://geopacific.com.au/top-20-shareholders/
The top two are long time supporters making up 61.6% of the share register having participated in the last two capital raisings so its very doubtful to be them and if it is a change in holding should issue.
3rd is JP Morgan at 5.7%, another extremely unlikely seller as they will have needed to have issued a "ceasing to be a substantial shareholder" report by now.
So that leaves just leaves three possibilities IMO that are selling down.
Home Ideas Show Pty Ltd 4th and 8th (41 million shares approx at 5/12/16)
Orion Mine Finance 5th (28 million approx)
Hsbc Custody Nominees 6th (20 million approx)
Home Ideas and Hsbc custody have both increased volume since March 31, 2016, presumably at the last capital raising, while Orion Mine Finance (
http://www.orionminefinance.com/history.html) is a new entrant in the top 20, again presumably as a result of the last capital raising.
Those shareholdings are minor compared to the total 1.15 billion share on issue and daily average turnover so if my theory is correct then this selling cannot continue long term.
So long term holders stay patient IMO, the share price increase will happen in time assuming GPR continues to march confidently towards proving the 1.2 million ounces as a resource!
Let's see if my theory has any validity when the updated Top 20 shows on release of the 2016 annual report around April 1 (based on 2015 report issue).
In the meantime GLTA!
(20min delay)
