Hello crew,
Those watching the SPOT tape will have noticed a large block trade of 225 000 shares ~82 cts this afternoon ~2:30 pm.
I am not the type of investor glued to their terminal but this actually caught my attention as SPOT doesn't usually trade like this. This looks like institutional activity which puzzled me even more given the recent fund raise at 80 cts which should have supplied most institutions with all they wanted. So I looked into it a bit more...
For those who have not yet connected the dots, New Found Gold was halted until noon today, news pending. Well, they've hit the motherlode!
Denis Laviolette President of New Found, stated: "The interval of 146.2g/t over 25.6m in hole NFGC-21-182 has a grade x width of over 3,700 g/t Au x m, the highest to date on this metric at Keats, benchmarked against a long list of outstanding holes. Very significantly, as a step out 65m down plunge and as the furthest down-plunge hole and the deepest assay interval returned to date at Keats, this hole demonstrates that the outstanding zone of high-grade gold at Keats is continuing and perhaps strengthening with depth. We couldn't be more excited to be continuing to intercept such a phenomenal interval on such a large step-out down plunge at Keats and this continues to build our confidence that Keats is a very significant high-grade gold discovery." On this news, New Found Gold was up 18% and closed at 10.86$.
From SPOT's last annual report 12/21, the Company had an investment in NFGC with fair value of $6,877,079. As a reminder, the share price of NFGC was around 4.05$ then. With today's jump, we're talking about a fair value of 18.5 millions, assuming they hold shares and haven't sold any. Very roughly, SPOT'S investment in NFGC is now around 1/5 of SPOT's market cap alone. An 18% move in NFGC should reflect itself in a ~4% move in SPOT. So there we have why an institution cleaned up the ask, and more, on SPOT.
I assume SPOT continues to be closely involved with NFGC and hope a news release by SPOT on this matter is imminent.
In any case, today's open market buy suggests to me that the fund raise is CLOSED and all shares have been snapped up by institutions including the over allotment. If my speculation is correct, then this is another great news as new institutions will have to chase SPOT in the open markets.
Cheers,
Hen