Carawine Enters into Agreement with Fortescue but Share Price Down

Gold and base metal explorer Carawine Resources Ltd [ASX:CWX] announced they’ve entered into an agreement with FMG Resources Pty Ltd, a wholly-owned subsidiary of Fortescue Metals Group Ltd [ASX:FMG].

Early in the day’s trading the CWX share price pushed up as high as 27 cents, but subsequently slumped to 25 cents at time of writing

ASX CWX Share Price Chart 1

Source: Optuma

What’s happening at Carawine Resources

The agreement between the two companies will see Carawine’s Eider tenement included in the Coolbro JVA with FMG resources.

This will see Fortescue pay Carawine Resources $50,000 within 30 days, with the exploration program expected to be underway soon.

Carawine’s Managing Director David Boyd mentioned:

Although at an early exploration stage, Eider has an excellent address and is considered highly prospective. Fortescue have agreed to complete an airborne geophysical survey and drilling program before they can earn an interest in the tenements…

The first stage of Fortescue’s exploration program is expected to commence soon, with Fortescue indicating its intention to include the tenement in upcoming Heli-EM surveys planned over the Coolbro JVA tenements, expected to commence during Q3/Q4 2020.

Where to from here for the CWX share price?

With this being the second announcement this week, the company looks to be moving forward.

Also announced recently were details of several new nickel and gold targets at its wholly-owned Big Bang tenement in Western Australia.

ASX CWX - Carawine Resources Share Price Chart 2

Source: Optuma

Taking a look at the charts, the price moved up to within striking distance of the historical resistance level of $0.27. Should it move through this then the level of $0.29 may become the focus.

On the downside, if price were to decline from here then the level of $0.24 may provide future support to a further fall.

Regards

Carl Wittkopp

For The Rum Rebellion

PS: Three Deep Value Stocks Currently Under-Priced: These ASX gems could potentially deliver market-beating returns as the economy recovers. Click here to learn more. 


Carl Wittkopp writes for The Rum Rebellion and has a diploma in Financial Planning. He specialises in the technical analysis of stocks.


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