Xanadu Mines (ASX: XAM) shares are up 100% and more in the last few days, 28% just today. Not unnaturally the Australian stock exchange has asked Xanadu if they can think of any reason this might be so. More importantly, is there any reason that Xanadu knows of which they haven't told everyone else. The answer to that being, well, no, nothing we know of. Except, well, maybe people are just excited by our exploration programme?
Exchanges do ask about odd share price movements, companies do have to answer, Xanadu: “Xanadu is not aware of any information concerning it that has not been announced to the market which, if known by some in the market could explain the recent trading in securities” That is, the price moves cannot be on the basis of inside information because there is no inside information, unannounced, which could cause these price moves. However: “ASX should note that Xanadu is in the middle of a significant drilling campaign and is in continuous receipt of assay results. We confirm there are no specific results requiring immediate release due to their material nature. Xanadu will continue to disclose assay results on a regular basis and in logical groupings to explain how its projects are evolving and improving. Our next such announcement is expected to take place within 1-2 weeks.” Perhaps people are just getting excited about the potential results of that exploration?
Xanadu Mines share price from ASX
The problem here, for us out here, is that this is clearly speculation on what that drilling programme will reveal. It could be - maybe - that there's a vast copper deposit there. Such have been found in Mongolia - Oyu Tolgoi is not exactly a small operation. There were past surveys done but something of a long time ago and Mongolia is both a big place and only recently became anything approaching a modern mining jurisdiction. So, yes, it is at least feasible that there's a monster deposit there.
But feasible, in the sense that something is possible, and that deposit actually being there, well, that's another matter. These current share price movements are operating purely on beliefs. There quite literally is no information at all - as Xanadu has said - which shows or proves that the current share price is justified. It's people taking a view - perhaps with a considerable amount of hope - over what those results are going to turn out to be. Some of the people taking views here will be correct. But which ones? That, sadly, is the hard part.
