Aston Minerals (ASX: ASO): At the bottom of an attractive 10 cent trading range

Behzad Golmohammadi Behzad Golmohammadi, April 6, 2022

One of Tolga’s plays

Aston Minerals (ASX:ASO) explores for cobalt, nickel, copper, gold, and silver deposits. Its flagship project is its Edleston Gold Project in the Canadian province of Ontario. What makes this company particularly interesting is that it has Tolga Kumova on its board with more than 11% ownership in the stock. For those of you who are not familiar with Tolga Kumova, he has made a fortune by picking the right juniors in the mining sector.

 

2021 was a massive year for Aston Minerals

Shares of Aston Minerals enjoyed a massive rally in the first half of calendar year 2021, increasing from 3 cents in February to above 23 cents in June. The reason behind this ecstatic rally were the company’s pleasing announcements regarding its Edleston Gold Project.

You can see the time and the impact of each price sensitive announcement made by the company in 2021 in the share price chart below.

 

Aston Minerals

Aston Minerals, Daily Chart in Semi-log Scale (Source: Metastock)

 

❶ Drilling program update for the Edleston Gold Project.

❷ Coarse Visible Gold Intersected in Edleston Maiden Drilling.

❸ 0.5m at 4,060 g/t Au intersected at the Edleston Gold Project.

❹ Visible Gold Intersected for Second Time at the Edleston Project.

❺ Nickel-PGE-Cobalt Targeting at the Edleston Project.

❻ Extensive Nickel-Cobalt Sulphide Mineralisation at Edleston.

❼ Maiden Hole into Boomerang Target Intersects 287m at 0.3% Ni.

❽ Significant discovery at Bardwell OF 53.5m at 0.49% Ni.

 

Now that we have a better picture of what has been going on with Aston Minerals in the past year, we’ll have a better understanding of what to expect going forward.

 

No news is bad news

Interestingly, since May 2021, there has been no exciting news on the project except some low purity of nickel discoveries. These nickel related reports failed to excite buyers as most investors are in the stock for its gold prospects and nothing else.

After periods of massive advances in the price, no good news means bad news for the share price. Time is always against small mineral exploration companies, such as Aston, as they keep burning cash and typically keep having to raise capital. This means further dilution and opportunity cost for shareholders. At the same time, you have many investors sitting on decent profits who are willing to sell. The result is that the share price often comes down under its own weight.

 

Running out of patience

The period of range trading within the green box in the chart was when the shareholders were patiently waiting for further good announcements on the Edleston Gold Project.

The recent break below the support level at 11 cents is a sign that investors are running out of patience. Losing the support level creates more selling pressure as more shareholders fear seeing lower prices.

 

What’s next?

In the case of no further exciting announcement by Aston on its Edleston Gold Project in the near term we can expect to see the stock retrace to the 78.6% Fibonacci level at 7.3 cents. After that the potential support level at 6 cents comes into view.

 

But it’s all about Edleston Gold!

Our techno-fundamental analysis showed that Aston’s share price is all about the Edleston Gold Project. Although nickel is a hot battery material right now, buying into Aston for its nickel prospects is not recommended.

But any good announcement about the Edleston Gold Project can substantially change the valuation of this small-cap mineral explorer. The $0.11-$0.22 trading range is certainly looking very appealing, especially since we’re at the bottom of that range right now!

 

You can learn more about the fundamentals of Aston Minerals by reading our report in the Stocks Down Under archive.

 

 

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Frequently Asked Questions about Aston Minerals

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