American Pacific Mining Corp (CNSX: USGD) stock has started edging lower after an excellent start to the year that saw it rally by more than 400%. The pullback looks to be just a minor correction, pending further movements on the upside, on investors taking profit.
American Pacific Mining Price Analysis
The stock’s impressive run stems from investors taking note of the progress made on the exploration of the company’s flagship Tuscarora Gold Project. In addition, the price of gold edging higher in recent months has all but continued to strengthen the stock’s sentiments in the market.
American Pacific Mining Corp succeeding on the raising of additional capital from the public also appears to have continued to strengthen investors’ sentiments in the stock. As it stands, the company remains well financed, after a string of capital raises, to proceed on exploration works at the lead gold project.
After a harrowing crash in 2018, American Pacific Mining Corp has bounced back nicely supported by huge trading volumes in the market, signaling renewed investor interest in the stock. After a 400% spike to the $0.23 level, the stock has pulled lower in recent weeks.
The emerging pull back faces support at the $0.16 level, above which the stock remains bullish and likely to continue powering high. A breach of the support level would leave the stock susceptible to a drop back to the $0.13 mark, the next support level.
A breach of the $0.13 critical support level could result in the acceleration of the sell-off wave back to the $0.06 mark. As it stands, American Pacific Mining Corp remains well supported for further upside action on pullbacks.
What Does American Pacific Mining Corp Do?
American Pacific Mining Corp is a junior resource company engaged in the exploration and development of precious metals properties in the United States. The company is mostly engaged in the exploration of gold as well as silver deposits at its flagship property Tuscarora.
Shares of American Pacific Mining Corp have continued to fly high in response to progress made on the development of the company’s flagship Tuscarora property. In the recent past, the company has entered into an agreement with OceanaGold U.S.
Under the terms of the agreement, OceanaGold is to make an initial cash payment of $50,000 to American Pacific Mining Corp. In return, the company will be entitled to a 51% interest in the property. In addition, OceanaGold has 60 days to exercise an option to earn an additional 24% by investing $6 million over the next four years into the project.
According to the President, Eric Saderholm, a deal with a mid-tier producer of OceanaGold caliber adds more merit to the high-grade epithermal gold project.
“This announcement adds excitement to the project and the company as we enter a new exploration season. OceanaGold is the perfect collaborate in our eyes, especially with the success they have had at Waihi in New Zealand—a similar high-grade epithermal system. For a company of our size, this transaction is a big milestone,” stated American Pacific Mining CEO, Warwick Smith.
The inking of the strategic partnership comes on the heels American Pacific Mining raising a significant amount of money from the debt market. In March, American Pacific Gold closed a non-brokered private placement for total gross proceeds of C$1.5 million.
In January, the company increased a previously announced non-brokered private placement of C$1.3 million in gross proceeds through the issuance of 13 million units priced at $0.10 per unit.
“We are thrilled to close this financing and welcome our new shareholders to the company as we focus on advancing and adding value at the Tuscarora Gold Project this spring,” commented Warwick Smith, CEO of APM.
A deal with a company of OceanaGold caliber should go a long way in accelerating American Pacific Mining bid to bring the Tuscarora project into fruition. The company’s balance sheet receiving significant boost means the company is well financed to enhance the exploration works at the Tuscarora gold project.
Recent price action has indicated that investors remain confident about the company’s long-term prospects as it continues with works at its flagship gold project. That said the stock is likely to continue surging, as has been the case for the better of the year, after the minor correction.
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Disclosure: We have no position in CNSX: USGD and have not been compensated for this article.