Matrix Metals - Broker's Target 19c from Newspaper Article. -...

Matrix Metals - Broker's Target 19c from Newspaper Article. - Source GC Bulletin

Recommendation: BUY Target: $0.19

A current preferred exposure to base metals is via Matrix Metals (MRX) which is exposed to London Metal Exchange Grade A copper cathode. Its Mt Watson deposit has seen several upgrades to the resource potential of that region with more drilling expected to bring about further upgrades. The share price action looks particularly attractive especially given that its gains to date have only made a small indent into the declines that the company first experienced when it listed.
As the physical chart above shows that although the stock has doubled since July, current levels are
still are long way shy of the 29 cent highs it traded at shortly after listing in 2000. We are encouraged
by the recent consolidation and the stock’s interest in wanting to break higher to new multi-year
highs.
We have highlighted an important trendline resistance zone across 10.5/11 cents which when convincingly broken will free the stock to finally correct at least a significant portion of 2000/2001 declines. Even a simple Fibonacci (61.8%) retracement of the entire 2000/2001 decline generates a target of 19 cents or almost 100% above current levels.
With the short-term price action off daily charts now beginning to find renewed interest from investors
(given by the mild breakout), all timeframes are with clear positive signals from indicators. This
unified front raises confidence that once 10.5/11 cents is broken upside could be quite substantial.
There have been several mining stocks which have after a three-month consolidation like that on MRX, have then rallied to new highs and produced between 100% and 300% gains.
It is also important to compare the underlying mining company with the behavior of the metal price
which it is associated. Even in Australian dollar terms copper for a break higher through A$3097/tonne which in fact coincides with a break of 10.5/11 cents for MRX. This combined correlation, together with a positive Australian dollar based copper price is an encouraging sign for MRX and that the best gains could still be ahead.