Minefinders (MFN) is ready to turn around.
Minefinders is a precious metals mining and exploration company. It owns and operates the Dolores gold and silver mine located in northern Mexico. The mine’s proven and probable reserves are 4.2 million gold equivalent ounces. MFN expects to produce 65,000 to 70,000 ounces of gold and 3.3 to 3.5 million ounces of silver in 2011. The company expects to achieve this at a cost of $450 to $500 per gold equivalent ounce cost. The company is also exploring two other sites in Mexico which are not yet in production.
The stock has had a sharp sell-off since late April 2011. It now sits at the 61.8% fib retracement of its rise from October 2010. This also happens to be a level of support created when a former line of resistance stretching back to late 2009 was broken on March 21, 2001. The money flow index has bottomed out and is now rising.
Here’s the trade (calculations based on June 10 close):
- Buy MFN at market.
- Stop loss is a daily close below 11.90 for a 3.3% loss. Sell all at market the next morning.
- Target one is the intraday price of 13.60 for a 10.5% gain. Sell half and move stop to breakeven.
- Target two is the intraday price of 14.07 for a 14.3% gain. Sell rest.