Terramin Australia (ASX: TZN) shares are up 100% today. Which seems really more than a little excessive. For the information in the announcement was all, already, largely known. We’ve therefore a violation of that efficient markets hypothesis - things already known are already in the price in a financial market. It is new information that is required to then change a share price. But if we’ve got an announcement which is - largely enough - a reiteration of things we already knew then why should this change the TZN share price?
Now, if we were talking of some micro- or nano- cap explorer then we could just suggest that it’s one of those things. But Terramin has a market capitalisation around the $100 million level (OK, in those bijou Oz dollars but still) so we’re not talking of a few millions being added as people wake up. This is a major addition to the corporate value. Which is odd.
The announcement: “ Tala Hamza Zinc Project. The Algerian Government has issued an Executive Decree of Public Utility (Decree) in respect of Tala Hamza. The issue of the Decree triggers the process for the acquisition by the Algerian Government of the 234 hectares of land which covers the footprint of the Tala Hamza mining permit. This land will be made available for the project. Terramin has engaged in ongoing discussions with various parties regarding the funding and construction of the project.”
OK, yes, important, for it means the project is to go ahead.
Terramin Australia share price from Google Finance
But we largely already knew this. The news that the gold licences had not been granted and were being sued over we knew. We also knew that the Algerian zinc mine had its permits: “The Algerian mining regulator has issued ASX-listed Terramin Australia with the mining permit for its Tala Hamza zinc project, satisfying all the regulatory, financial and environmental requirements for the project.”
The thing is, the announcement from Terramin is simply the quarterly report. It’s the list of “Here are the things that have happened”. It’s not a list of new things. We therefore find the 100% share price rise more than a little mystifying. Especially as it’s on very little trade - the exchange is suggesting perhaps some $14k’s worth of turnover which for a company which started at $50 million and ended at $100 million is really very small.
One of those little mysteries and we’d not be surprised at all to see at least some of this price change fade away.