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

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

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

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

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.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »