News

August 07, 2008

Caledon Resources Starts To Deliver, Which Should Please Major Shareholder Polo Resources Too

By Rob Davies

In the mining markets a share price that shoots up from 40p to 140p and then back to 80p would normally be assumed to belong to an exploration company that had discovered a new deposit. So it went with Goldsource Mines and its recent coal discovery in Saskatchewan. But the share price movements mentioned above don’t relate to any new discovery. Rather it’s the recent trading pattern of Caledon Resources, which is already up and running as coal producer.

Although some of the price action was due to the big increase in coal prices this year, most of it was due to Polo Resources, which earlier this year built up a 25 per cent stake in Caledon. Its average entry cost has been estimated at about 100p a share, so the current level of 80p is a bit painful. Since that buying spree, Polo has appointed two people to the Caledon Board. But what was slightly odd was that these appointments were made the day after the AGM was held, so shareholders didn’t...