Riversgold Settles Matters with Former Managing Director; Stock Trading in a Wedge

  • May 31, 2019 AEST
  • Team Kalkine
Riversgold Settles Matters with Former Managing Director; Stock Trading in a Wedge

Riversgold Limited (ASX: RGL) is an ASX listed metals and mining company based in Australia and has a primary interest in exploration and development of gold having projects in Australia and Alaska. It is also engaged in exploration activities on the Kurnalpi Project situated in Western Australia.

On 30th May 2019, the company announced that it has reached a confidential settlement with former Managing Director, Mr Allan Kelly with respect to claim for payment of outstanding entitlements by the company post his resignation as Managing Director on 15 March 2019.

With the settlement in place, Mr Kelly would withdraw the statutory demand lodged by him and the proceedings to set the demand aside will be discontinued.

Mr Kelly resigned on 15th March 2019 and on 26th March 2019, his role was terminated.

On 28th May 2019 Riversgold announced the exchange that the company has received firm commitment from sophisticated investors to raise approximately A$218,000. The company intends to use the funds raised for working capital purposes. It intends to issue 9.93 million fully paid ordinary shares at A$0.022.

On 16th May 2019, the company reported on results from its Little gold prospect.

On 6th January 2019, the company announced the discovery of unexpected multiple gold deposits At Farr-Jones.

Technical outlook

Riversgold Limited was listed on the ASX in October 2017, at A$0.24, and since listing, the stock price has been falling setting a clear downtrend. The biggest fall in price was witnessed on the listing week itself, with the stock closing down by more than 16% from its listing price.

Post the weak listing, the selling pressure did not subside, and the stock kept on sliding, finding no major support in between. The downward move has thrown the stock to the current price of A$0.021 as of (31th May 2019) which accounts for a massive fall of more than 90% from the listing price.

However, there is a positive development in the stock price pattern. If the weekly chart is to be analysed, then once can see the formation of a falling wedge pattern.

Falling wedge is a bullish reversal chart pattern that is formed during a downtrend. In the falling wedge pattern, the prices trend down in a narrowing range (depicting the current downtrend). Upon joining the swing highs and the swing lows, two falling trendlines can be constructed.

The stock bounces off between these two trendlines as upper trendline works as resistance (red line on the chart) and the lower one as support (green line on the chart). As time passes by, the stock keeps on falling in a converging range, and consequently, both of the trendlines also squeeze towards each other (as seen on the chart).

Weekly Price Chart of Riversgold (Source: Thomson Reuters)

At the lowest point where both trendlines are about to meet, the stock is expected to give a breakout on the upside. However, there is no hard and fast rule, and the stock could even break below its lower trendline.

In the case of Riversgold, the stock has almost reached its breakout point, but still, no bullish activity is seen on the chart.

Stock Performance

The company has a market capitalisation of A$1.92 million, and the stock had touched a 52-week high and low of A$0.16 and A$0.21 respectively. The stock last traded on 27th May 2019, and the last closing price is A$0.21. The last one-year return of the stock is negative 82.5%, and the YTD return stands at negative 72%.


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