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Australasian Gold (ASX:A8G) share price explodes 80% higher before being halted, then resumed

What on earth happened to the Australasian Gold share price today?
The post Australasian Gold (ASX:A8G) share price explodes 80% higher before being halted, then resumed appeared first on The Motley Fool Australia. –

The Australasian Gold Ltd (ASX: A8G) share price has certainly had a day to remember this Thursday. This small-cap gold miner has seen its share price rocket an incredible 80% at one point this morning. That was before the ASX stepped in and halted the company’s shares from trading. A few hours later, trading has now resumed.

But let’s backtrack a little. Australasian Gold is a tiny ASX company by normal standards. It currently has a market capitalisation of just $9.77 million.

This company is in the exploration phase, and has purchase agreements over 274.3sq km of tenements. These include the May Queen and Mt Clermont gold projects in Queensland, and the Fairview gold project in Western Australia.

So what happened to Australasian Gold shares today?

Australasian Gold share price targeted for ‘pump and dump’

Well, Australasian Gold’s shares rocketed on open… on no major news or announcements out of the company. Soon after open, Australasian Gold shares hit a high of 47 cents a share, which represents a rise of roughly 80% from yesterday’s close.

Soon after this, the company’s shares were placed in a trading halt following a ‘speeding ticket’ from the ASX. The ASX sent the company a ‘please explain’ regarding the unusual trading happening this morning. Australasian Gold told investors it wasn’t aware of anything that might have caused this activity.

However, a report from the Australian Financial Review (AFR) today places the blame on an online investor group. Here’s what the report alleges happened:

Members of two organised ASX pump and dump groups using encrypted messaging app Telegram named it [Australasian Gold] as a target… Messages to the group chats in the days prior to the pump signal flagged the morning of September 9 as the target date for an organised pump of a penny stock, which preferably had a price sensitive announcement to evade a quick trading halt from suspicious regulators.

Well, it seems to have worked, at least for a time. although it is worth noting that the group’s apparent aim of evading the ASX regulators didn’t entirely go to plan, given the rather swift trading halt.

But perhaps the group’s potential reasons for targeting Australasian Gold are now more clear. This afternoon, the company has released an investor presentation, albeit not one designated as ‘price sensitive’ by the ASX.

This presentation outlined some results from initial drilling at the company’s three gold projects. Probably nothing that might normally result in the kinds of share price moves we saw this morning though.

At the time of writing, the Australasian Gold share price has resumed trading today, and is currently sitting at 30 cents a share. That’s still up 17.65% for the day, but well below the 47 cents a share peak we saw this morning.

The post Australasian Gold (ASX:A8G) share price explodes 80% higher before being halted, then resumed appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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