On the floor of the Australian Securities Exchange (ASX) a dramatic resale of Scotgold Resources Limited (ASX:SGZ), (LON:SGZ) kicked out the share price almost below the zero today.
SGZ closed the market at 0.011 AUD on the ASX with reduced by 21.43% weight, while on the London Stock Exchange the stock has been traded within the range of 0.77 – 0.80 GBX.
Was that a signal for a high disappointment in company’s stock on the Australian capital market or one could say that recent performance of SGZ on “Australian land” may just be a confirmation for a poorly executed by Scotgold Resources PR campaign.
Last Thursday, the company announced its intentions to apply for a voluntary delisting of its securities from trading on the Australian Securities Exchange (ASX). According to Scotgold Resources, the delisting date is expected to be 7 October 2016, with a final confirmation for the date to be done by ASX.
Amongst released reasons for delisting were these that 98% of overall trading in the last six months has taken place on AIM and that “around 87% of Scotgold’s shareholding is held by UK residents or registered as depositary interests on AIM”.
Not less weighed argument in favour of delisting which Scotgold Resources presented has been the fact that company’s strategic assets are located in the UK together with some early interests in Europe.
At first sight these arguments seem reasonable but deeper analyses of the company’s stock performance on ASX is raising other topics for discussion.
The 52-week trading range of SGZ on ASX is circulating between 0.00 AUD and 0.02 AUD. Even if we ignore the abjection and sinking of the share price of SGZ with 21.43% today, the most recent trading range of Scotgold Resources’s stock is 0.01 – 0.01 AUD.
Though we want to ignore aforementioned facts, related to the almost zero levels of the share price within a year time frame, the chart presented here will bring us back to reality.
As seen on the price chart here, since the summer of 2013, investors valued SGZ at 0.00 AUD and less than 0.02 AUD. Seems that this is a three years’ trend which may be buried only through de-listing of SGZ from trading on the Australian Securities Exchange.
Many stock exchanges have listing rules, one of which being the frequency of trading and the securities price. If the minimum set by the stock exchange thresholds related to them are not met within certain period of time the listing and/ or trading of a security can be suspended.
Scotgold Resources Limited has not released information, related to the suspension of SGZ on ASX as of today. Possibly, the company decided to overtake in time and to make a face-lift to its stock. Unfortunately, only time and investors may show to what extend the share price of Scotgold can withstand the surgery.
Scotgold Resources Limited is an Australia-based mineral exploration company with main projects based in Scotland. The company plans to explore and mine gold and silver within Central Scotland. Company’s Cononish gold and silver project is located in the Grampian Highlands of Scotland. The project is permitted by Loch Lomond & the TrossachsNational Park Planning Authority for operations and full scale development. Company’s shares are listed on two markets- the Australian Securities Exchange (ASX) and AIM board of the London Stock Exchange. The home exchange for SGZ is ASX Perth, Western Australia.
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