Landore Resources Ltd (LSE:LND) announcement of dropping plans to sell a few of its assets was received positively by investors_¹. This news temporarily stabilised the Landore share price. Additionally, the company’s increased focus on the gold resource at the BAM deposit at Junior Lake has further uplifted investor confidence.

As the company is progressing slowly and steadily, let’s explore the prospects of Landore share price.

Key Points

• The company is increasing its focus on the gold resource at the BAM deposit at Junior Lake.
• Landore has a huge dependency on oil prices.
• Analysts correctly represent the progressive performance of the company in the share price prediction.

What does Landore do?

Landore Resources Ltd is engaged in exploring and developing a portfolio of precious and base metal properties in North America. Its main project is the BAM Gold Project, located on the Junior Lake Property. The company plans for 2023 to focus on advancing its highly prospective BAM Gold Project towards a two-million-ounce resource estimate, together with completing a pre-feasibility study.

The company reported a loss, after tax, of £1,860,585. This is a 114% improvement from the previous year’s loss of £3,991,717. While the company is in the exploration phase, the losses seem acceptable. Moreover, the improvement in losses is surely uplifting news for investors.

The bull case for the Landore share price

Landore share enjoyed a bullish run from March 2020 to April 2021. During this period, the stock picked up pace from a price of 9.2p to 36.5p, representing an almost 3-fold increase during this period.

The company’s biggest growth accelerator is its BAM gold project. According to the company’s management, Landore is in a strong position to advance the BAM gold project and the company’s base metals projects this year. If the company keeps on progressing as planned, Landore shares could soon become the next sought-after stock, in my opinion.

The bear case for the Landore share price

Landore share has been on a prolonged bearish run since April 2021. From a price of 36.5p, the stock last closed at 9.5p. During this two-year period, the stock has lost a substantial 74% value.

Exploration companies like Landore have a huge dependency on oil prices. The volatility in fuel prices can lead to unforeseen losses, which can take a significant toll on the company’s finances.

Landore Share price prediction

The Landore share price prediction correctly reflects the progressive performance of the gold exploration company. The analyst’s price forecast for the next 12 months is set at 12p. Compared to the current valuation, this forecast suggests that investors may be looking at a buying opportunity.

However, I never base my investment decisions solely on stock price forecasts since there is always a degree of uncertainty.

Should I buy Landore shares today?

The exploration company’s progress has been slow and steady in the recent past. But it is still moving ahead. Moreover, the regular payments from selling interest in the lithium project have secured the working capital requirements for the BAM Gold project. This is comforting news for all investors as the BAM project is one of the key projects and growth accelerators of the company.

Operationally, the company seems to be advancing, but the Landore share price still doesn’t appear to be reflecting this development. As an investor, while my confidence is renewed, I would prefer to see some progress in the exploration company’s share before planning to invest in its stock. Therefore, I’m keeping this business on my watchlist for now.

Article sources

1. Proactive Investors. Landore Resources decides to keep assets after a strategic review

Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.