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Trade idea: A precious profit from Fresnillo
Michael Jarman from H20 Markets is looking to make a profit from Mexican precious metals miner Fresnillo. He says the recent geopolitical tensions in Syria and Egypt have seen the price of precious metals rise, and that Fresnillo shares have jumped a whopping 52% as a result.
Fresnillo has a high-quality asset base with average mine lives of more than 20 years for silver and seven years for gold.
In July, it saw a 30% fall in profits and net cash flow, primarily due to decrease in average realised silver and gold prices. Michael says that this drop combined with a higher input cost should prevent from rallying any further.
Michael says that GBP 12.88 and GBP 15 have been the support over the past three years. He is planning to use a technical role reversal and is targeting £10, which is a 22% upside.
01:06 minutes
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