The time to buy is often when others are selling, and Seafield Resources (SFF, TSX-V) was an excellent example of that today. We were buyers in this market today and so too were some of our readers.
Seafield got hammered down to a closing price of 18.5 cents on nearly 2 million shares today. The stock has shown some weakness recently, for reasons we have already outlined here at BMR, but the news regarding Greystar Resources (GSL, TSX) and its need to file a new environmental impact assessment for its Angostura gold-silver mine seemed to spook a few more people into dumping their Seafield stock for no reason at all.
Seafield confirmed in a news release after the market close that Colombia’s new environmental legislation has no impact on its Quinchia properties which are all at a much lower elevation than Angostura. The action in Seafield was particularly difficult to understand today given the fact that neighbor Medoro Resources (MRS, TSX-V) actually increased in value.
Seafield closed today exactly at its 200-day moving average (SMA) where it has incredibly strong support. The stock recently dropped below its 100-day SMA for the first time since last summer, but it’s important to point out that Seafield’s overall uptrend remains firmly intact with rising 100 and 200-day moving averages. The stock is at very oversold levels and we do believe today was an important “capitulation” moment which is actually healthy from a technical point of view. The stock will strengthen from here.
Fundamentally, Seafield is in a strong cash position, has a portfolio of excellent properties at Quinchia and the right people in place to advance them. The company is in the process of ramping up its exploration efforts at Quinchia with drilling expected to commence soon.
Bottom line: Seafield is a strong buy in these very oversold conditions, and we believe the best is yet to come from this stock which BMR first introduced last summer at just 6 cents.
