Dacian Gold’s Share Price Drops Before Signalling Trading Halt
Trading in Dacian Gold Ltd [ASX:DCN] shares has been put on hold today pending an announcement regarding production at its Mt Morgans Gold Operation.
Dacian’ Gold’s share price has been tracking downwards since February, shedding 8.24% over the past few weeks. With a bullish gold price, many investors have been left to speculate on the cause for the decline.
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What’s caused Dacian Gold’s trading halt?
According to an announcement this morning, Dacian requested a trading halt pending an update for the March quarter and FY2019 production guidance at its Mt Morgans Gold Operation.
Dacian has provided encouraging results from its Mt Morgans Operation since the end of last year, with no details to cause doubt in the operation.
Back in December, DCN said it was on track to establish a 10-year mine life while averaging more than 200,000 ounces a year.
The company also achieved a 30% increase in gold production for the December quarter, with production at 37,930 ounces of gold.
There are two likely causes for the halt today: management have underestimated their guidance target significantly and need time to amend the error, OR something has happened to have caused a sharp change in momentum at the mine.
From the last update, Dacian said production and ore grade was set to increase quarter on quarter and confirmed a mill reconciliation rate of 103%. They also expected dilution or loss of ore was at feasibility study levels or better.
For now, the cause of the halt remains pure speculation.
What’s next for Dacian Gold’ share price?
What comes next hinges on the content of Dacian’s update.
With the share price sliding downwards over the past few weeks, it wouldn’t be unreasonable to suggest that perhaps some insiders believe bad news is on the horizon and have begun to sell off.
If the news is negative, best case scenario would be that there was equipment failure or some damage at the mine, which has halted production and has forced management to rethink their production guidance.
More to come.
For Money Morning
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