When a board director spends almost a million bucks of his own money buying more shares in the company he runs, it's usually a positive sign for investors.
In a statement to the ASX this week, Austral Resources Australia Ltd (ASX: AR1) revealed that executive director Daniel Jauncey has spent $848,774 purchasing 1,615,066 shares in the micro-cap copper miner.
The significant thing here is that it was an on-market trade. Not an exercise of options. Or a rights issue. Nor director's remuneration (where the issuing of new shares forms part of a director's salary package). It was just Jauncey spending his own money to invest in this young ASX mining share.
Jauncey purchased the shares in a series of trades between 8 June and 10 June. The Austral Resources share price moved between 54 cents and 56 cents over these three days.
Jauncey directly held 10 million shares in Austral Resources prior to the trades. So, his recent purchases represent a 16% increase in his investment.
Image source: Getty Images
What does a major purchase by an ASX insider signal?
Well, ask yourself, how much confidence would you need to feel in an ASX share in order to put almost $1 million of your hard-earned money into it?
In most cases, when a company insider makes a large on-market purchase, it usually means management is feeling very confident and optimistic about the future of the company.
What is Austral Resources?
Austral Resources is a copper producer in Queensland's Gulf Country. It's a relatively new ASX mining share, having commenced trading on the exchange in November 2021.
Its initial public offering (IPO) price was 20 cents. Today, it's trading at 43 cents, down 7.6% for the day so far but up 165% year to date.
The company owns the Lady Annie copper mine, which produces LME quality copper cathode. It's also just finished developing a new mine at Mt Isa.
Austral Resources also lays claim to "1,340 km2 of highly prospective exploration tenements", some with advanced exploration status.
What's the latest news from this ASX mining share?
This week Austral announced its first production of copper cathode from its new Anthill mine in Mt Isa.
This follows an intensive eight-month site development that turned a paddock into an open-cut mine.
The company said this first production "paves the way for Austral to meet its stated objective of producing copper cathode at a rate of 10,000 tonnes per annum from mid-2022".
Approximately 354,000 tonnes of copper oxide ore were mined in this first production. It represents more than 4,000 tonnes of contained copper.
Austral CEO Steve Tambanis said it was a huge milestone:
The most important aspect is that the operation is de-risked and comfortably ramping-up to design capacity of 10,000tpa cathode. With that comes increased sales revenue and cashflow.
Our exploration and development activities are being scaled up to discover and deliver new copper ore.
