Magnum (ASX:MGU) share price plummets 9% despite business update

The Magnum Mining and Exploration Ltd (ASX: MGU) share price is in reverse despite the company providing a positive operational update.

| More on:
falling industrial asx share price represented by sad looking woman in hard hat

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Magnum Mining and Exploration Ltd. (ASX: MGU) share price is in reverse during late afternoon trade. This comes despite the company providing a positive update to the market on its operations.

At the time of writing, the mineral miner's shares are fetching 15 cents, down 9.09%.

Magnum operations fast-tracked

Investors are hitting the sell button on Magnum shares following the company's update and amid a broader sell-off on the ASX today.

In its announcement, Magnum provided a number of updates regarding the progress of its "shovel ready" magnetite project in Nevada, United States.

The first piece of news related to the relocation of the company's managing director, Mr Dano Chan, to Nevada from this week. The move will allow Mr Chan to oversee the project's development and aligns with Magnum's efforts to speed up works onsite.

Magnum also stated that it's currently in talks with port authorities in the United States. It is working with contractors and logistics firms to fast-track its first iron ore shipments to international markets.

In addition, the company plans to open an office in Salt Lake City at the end of this month. Discussions with several tier-1 steel mills are taking place along with commodity buyers for the purchase of its iron ore.

Lastly, Magnum noted it is sending a second set of iron ore samples for lab testing. It hopes that it will be able to finalise a design and determine costings for producing hot briquetted iron (HBI) and pig iron.

Judging by today's Magnum share price action, investors are not overly excited by the company's updates.

Magnum managing director Dano Chan commented:

We are initially focusing on mining the high-grade pods which allow Magnum to start generating cash flow quickly and accelerate the development, size and scale of the mine to take advantage of the record iron ore prices.

We expect this fast-track DSO strategy to bring value to our shareholders, limit shareholder dilution and also help fund the expansion of the mine and growth plans for future HBI Green Steel product.

Magnum share price review

A strong 12 months hyped up by positive investor sentiment has led the Magnum share price to jump by over 260%. Year to date performance is just as impressive, with Magnum shares posting gains of more than 170%.

Based on valuation metrics, Magnum commands a market capitalisation of around $76 million, with approximately 465 million shares outstanding.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Why did the Mineral Resources share price rip 15% higher today?

The iron ore and lithium giant was the fastest riser of the ASX 200 on Thursday.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Resources Shares

2030 forecast: As Australia's iron ore export earnings decline, copper will rise. What does this mean for BHP shares?

BHP is expanding its iron ore and copper production.

Read more »

An engineer takes a break on a staircase and looks out over a huge open pit coal mine as the sun rises in the background.
Resources Shares

4 reasons to buy BHP shares today

A leading expert outlines four key reasons BHP shares are a buy.

Read more »

Businessman walks through exit door signalling resignation
Resources Shares

Pilbara Minerals share price drops as CFO announces resignation

It’s been a challenging few years for outgoing Pilbara Minerals CFO Luke Bortoli.

Read more »

Miner looking at a tablet.
Resources Shares

What happened with the BHP share price in May?

Did you buy BHP shares in May? Here’s how much the ASX 200 miner returned.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Resources Shares

Should I buy Fortescue shares today?

A leading investing expert offers his verdict on the outlook for Fortescue shares.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Resources Shares

Is this a good time to buy BHP shares?

Should investors jump on the ASX mining shares right now?

Read more »

a miner holds his thumb up as he holds a device in his other hand.
Broker Notes

Why Macquarie expects this ASX 200 copper stock to surge 36% in a year

Macquarie forecasts some hefty gains ahead for the ASX 200 copper miner. But why?

Read more »