The Korab Resources Limited (ASX: KOR) share price is sinking during midday trade despite no new company news today.
At the time of writing, the magnesium miner's shares are fetching for 9.3 cents a pop, down 7%. It's worth taking note that regardless of being heavily down on Tuesday, its shares have rocketed 290% since last month.
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Why are Korab shares falling today?
A strong catalyst behind the Korab share price taking a negative turn could be attributed to investors taking a profit.
After reaching a record high and breaking the psychological barrier of 10 cents yesterday, its shares appeared to be overbought. This led to the relative strength index (RSI) from 75 back down to normal levels.
The RSI is a momentum oscillator that is used to assess the strength or weakness of a share price.
What did Korab recently announce?
Just yesterday, Korab released a positive update in relation to a magnesium metal export deal with Darwin Port Operations Pty Ltd (DPO).
The Heads of Agreement (HoA) will see up to 30,000 tonnes per annum of magnesium metal and other magnesium compounds exported through the port.
The 3-year deal gives Korab access to use DPO facilities to export its products. DPO facilities include a truck dump, ship loader and conveyor, and unloading of (mining and plant construction) equipment.
All labour to operate the DPO facilities when handling the product will be responsible by Korab. In addition, regulatory approvals are required to be obtained to use the DPO's services.
Korab stated that the deal will see large quantities of high purity magnesium metal shipped into Europe, the United States, and Asia. The critical metal has reportedly been suffering constant shortages and supply interruptions, which are likely to continue.
Short haulage distance on existing roads from mine to port will have minimal capital costs and low operating costs for Korab. The company's Winchester magnesium project is located at Batchelor in the Northern Territory.
Korab share price summary
In the past year, Korab shares have surged by around 550%, with year-to-date sitting at 600%.
Korab has a market capitalisation of around $33.4 million, with more than 367 million shares on its registry.
