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Will Solgold shares keep rising? Zak Mir tells traders to 'buy dips'

Last updated: 06:30 19 Oct 2016 BST, First published: 11:30 18 Oct 2016 BST

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Is SolfGold going to 25p or more

It may be up nearly 900% in 2016 in 2016, but, technical analyst Zak Mir doesn’t think SolGold plc (LON:SOLG) is quite done for the year.

The stock is not overbought and is worth buying ‘on dips’, according to Mir.

The chartist, in a Tip TV segment for Proactive Investors, says the chart showed a “classic one-two” as the price recovered earlier this year, prior to this summer’s near exponential rise.

Nevertheless, Mir says the price could keep going, to above 25p or more.

“The shares are obviously up a long, long way but we do have support … the hope would be while we remain above that zone the shares could head to 25p plus – which of course would be very nice even from current levels,” Mir said.

“Any dips towards the upper teens levels [are] currently regarded as a buying opportunity on a technical basis.”

A competitive funding and negotiations

Solgold has just completed a competitive funding, taking new capital from mining major Newcrest and investment group Maxit Capital. Shares were sold at 16 US cents each.

The arrangements brought in over USS$33mln of cash and was the company’s preferred option, over an alternative proposal from BHP Billiton.

Billiton offered US$30mln to take a 10% equity stake in AIM-quoted SolGold, which is the equivalent of 22 US cents per share, and proposed to spend US$275mln on the project in order to earn 70% of the project.

Last week, SP Angel mining analyst John Meyer told Proactive Investors that he expects SolGold and BHP to get back round the table and continue negotiations.

“I’m not sure they’re used to being rejected by mining companies but they are used to having to negotiate their way into deals,” Meyer says.

“Looking at the conditionality of the offer that’s been initially proposed, it looks as if they would be looking forward to several months of protracted negotiations.”

Meyer also believes that other major players will also be sniffing around to see if they can get their hands on SolGold’s Cascabel copper project.

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