Applied Minerals Inc (OTCMKTS:AMNL) was one of the companies that had come on to the radars of investors in a big way on Monday and ended the day by clocking gains of as much as 8% as a consequence. Before getting into the reasons behind the rally in the stock and specific development, it may be useful for investors to get a better idea about the sort of business that the company is involved in.
Trading Data
On Monday, AMNL stock moved up 8.33% to $0.0039 with 4.66 million shares, compared to its average volume of 1.98 million shares. The stock moved within a range of $0.0037 – 0.0046 after opening trade at $0.0039.
About Applied Minerals Inc
The company is best known for the Dragon Mine property in Eureka. It is a property that produced natural iron oxides and halloysite clay. In turn, Applied Minerals markets these products into a wide range of lucrative industries which include controlled release and lithium ion battery industries among others. The holloysite materials are sold by the company under the brand name DRAGONITE, while the iron oxide products are sold under the brand name AMIRON.
Now that you have a pretty good idea about the nature of Applied Minerals’ business, it may be a good idea for investors to consider taking a look at the development from yesterday.
Applied Minerals Enters into Agreement to Sell its Iron Oxide Assets
The company announced yesterday that it had finally completed an agreement by way of which it is going to sell the rights related to its iron oxide mineral resource and other related assets. The details were revealed in a Form 8-K that had been filed by the company back on June 2, 2022. More importantly, it was also noted that the proceeds that are going to be raised from the sale of these assets are also going to help the company in significantly improving its liquidity position.
The improvement in the liquidity position is expected to have a significant effect on the company’s halloysite business as well since Applied Minerals is going to be able to finance further growth of that segment. In addition to that, it is also going to be able to further develop its halloysite product that is going to be deployed in the fast-growing lithium ion battery industry.
On the other hand, the improvement in the cash position of Applied Minerals will also make it possible for the company to not go for capital raise options which may result in dilutions of the stock and it goes without saying that it may be a seen as a positive by many shareholders.
The iron oxide assets are going to be picked up by Brady McCasland Inc and as part of the sales agreement, McCasland is going to provide Applied Minerals with the business development personnel who are going to help in further developing the halloysite business. It is also important to keep in mind that the whole thing is not going to cost Applied Minerals anything.
The company is going to provide a detailed business update once the sale is completed and investors could do well to keep an out for the update. At this point, it remains to be seen if the stock can continue to add to its gains.
Key Quote
The CEO of Applied Minerals, Chris Carney, commented: “The sale of the Iron Oxide Assets is a significant step for the Company as it provides us with the capital needed to continue the pursuit of high-value revenue opportunities that exist for our halloysite clay products. Furthermore, we look forward to collaborating with BMI to identify additional application markets for our halloysite clay business.”
Technical Data
AMNL stock is trading below the 20-Day and 50-Day Moving averages of $0.0043 and $0.0053 respectively. Moreover, the stock is trading below the 200-Day moving average of $0.0107. The company has a total market capitalization of $1.02 million. The stock is down 22% over the past month.
