Back then, the initial catalyst of obtaining of the mining license on May 5, did not have the expected impact; speculation of the stock going over $0.50 did not materialize. The next catalyst projected, was whether Scandium Investments LLC (SIL) would: a) convert project interest in equity stake and/or; b) further invest in the company towards the construction of a mine (estimated at $100M). Since then, the SCY.TO reported the following:
May 30 - Signed an Engineer, Procurement, Management and Construction (EPMC) contract with Lycopodium for the Nyngan Scandium Project.
May 31 - Canaccord Genuity maintained their speculative buy rating and raised their stock price target from C$3.80 to C$3.90.
Jun. 15 - Memorandum of Understanding (MOU) and agreement between SCY.TO and SIL. SIL is to acquire 20% ownership of EMC Metals Australia Pty Ltd. ("EMC-A"), a subsidiary of SCY.TO . SCY.TO will issue 57M shares and SIL gets two board members: 1) Peter Evensen, the retired CEO of Teekay Corporation; 2) Chris Evensen, the retired co-founder of Canyon Capital Advisors, a multi-billion dollar hedge fund; and a professional investor in the global metals and mining industry across both equity and credit asset classes.
Jul. 20 - Private placement completed for $1M at $0.30 cents. No warrant or commission fees.
Aug. 4 - Insider purchase at $0.30 by board member - Mr. James R. Rothwell for $34K.
As displayed by the chart above, the period of May 5 to August 14 constituted a slow but steady sell off. As mentioned, obtaining the mining lease had a limited impact, and furthermore the MOU with SIL converting their interest into an equity stake in the SCY.TO also did not have much of an impact.
However, from August 14 - 28 (7 trading days), the stock regained all the value (then some - 65% movement) that it lost in the last 3.5 months.
The correction was very impressive! In fact, we were surprised that IRROC did not halt trading.
Looking back, on August 15, it was reported that Leigh Clifford - current Quantas Board Chair and former head of Rio Tinto (full profile here) bought $250K in the private placement of July 20. This might be what gave the stock its wings. Interestingly, it dovetails nicely with two facts: a) Scandium potential application in the airline industry and b) Quantas' quest to complete the Sydney-London journey (non-stop). The chart also reveals the reduction of a buy cycle which turned into a sell signal in the past week.
For now, the next possible catalyst for the stock appreciation is considered by many to be the shareholder meeting scheduled for Sept. 11. It is expected then that the MOU of June 15 is set to become official. Since the Evensen's brothers are wealthy and well connected, it is believe that the financing of the mine construction (which SCY.TO has already contracted to Lycopodium) will be facilitated by having them on board; $100M total is needed.
Based on previous trading history, return to $ 0.30 is not a possibility to rule out as two of the last private placement were raised at that level. In addition the last two expected catalyst did not have an impact on the stock price. However, it could be that this time, the stock trends at current level and eventually gain additional value. Below is the forecast for the week. It will be interesting to monitor to see if the stock sells off, maintain or breaks.
Closing price in the high (Hi) confidence interval might suggest a break out, (Lo) suggest the contrary.
In any event, we still consider SCY.TO to be a unique long opportunity as they have "first mover advantage" in the space. We will be watching closely this week and for the weeks to come to see if the company can raise the funds to start building Nyngan Project mine and take its valuation to the next level.
Hopefully, the third time is the charm.
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