Spread Betting Ortac Resources

Ortac Resources is a gold-mining company, and was incorporated in 2007 in London. It is listed on the AIM, the Alternative Investment Market part of the London Stock Exchange which was established for smaller companies. Some companies on the AIM move on to grow and obtain a listing on the LSE, but by their nature these companies are usually speculative and may also slip into obscurity.

Ortac concentrates on exploring and developing mineral resources in Europe, both for precious and base metals, but the current interest is in possible gold resources in Central Slovakia. It must be said that such a company is highly speculative for an investor, but for the spread better, who can be more reactive to price changes and can bet on prices going down as well as going up, this sort of company can represent a great deal of profit.

For instance, shares have exceeded three pence each a year ago, but are now below a penny. Because of the business they are in, mining companies frequently have to make “best guess” estimates of the resources that they command, and any subsequent corrections can again cause wild swings in the price. At present, Ortac believes it has access to 1.2 million to 2 million ounces of gold which it can remove and refine for about $500 per ounce, less than a third of the current market price.

As always, there have been setbacks in developing this, and the project has been put back at least a year. This in some part explains the recent slump in share prices, but you can expect the prices to be volatile in any case in this market sector. There is a further resource in eastern Slovakia which is reckoned to hold half million ounces of gold, and tests are being undertaken.

Apart from this, the company plans to stay in Europe because of the political unrest in Africa which makes it a hazardous area in which to commence operations. While looking outside Europe, the company is well placed to expand its operation locally, particularly as Slovakia has a relatively low labour cost and taxation.

There are several routes that such a company can take. It can be a takeover target for other companies who want to lay claim to the resources discovered, and this is beneficial to shareholders though it would only be a one off opportunity for spread betters to profit. Shareholders generally do not expect to have dividends from a speculative company like this one, but look for profits from increasing share prices. The early investors also have an opportunity of the company growing and multiplying their investment.

Therefore, this is a young company which can develop in many different ways, and the share prices will be subject to great fluctuation almost regardless of how it unfolds. Much of the share price movement is news driven, and also relies on accurate interpretation of announcements and potentials. If you use technical analysis, you can benefit from other traders sentiments and feelings about the stock price, as without company analysis you will be able to see the mood of the general market.

Spread Betting on Ortac Resources

Ortac Resources is a low-priced share listed on the London Stock Exchange’s alternative market. It is highly speculative, and would respond well to detailed investigation and news gathering. Because of its volatility, any spread betting should be accompanied by risk reduction strategies, and it is probably better suited to an experienced spread better. The current price is 0.8279 – 0.8321 for a rolling daily bet.

As it is such a low value share, the betting size must be larger. With IG Index, the minimum bet size is £5 per point. If you think that it is going to increase in value, you could place a bet for £25 per point, and your long bet would go on at the higher price of 0.8321. If you are right, and the share goes up in value, then you might choose to close your bet when it reached 2.5313 – 2.5355. The bet closes on the lower or selling price of 2.5313.

To work out how much you have won, first you must work out how many points you have gained. The difference between the opening and closing prices of 0.8321 and 2.5313 is 1.6992 points. Multiplying this by your stake of £25 per point, you have won £42.48.

With such a volatile share, you should not be surprised if the bet does not go your way and you must be ready to close your bet and minimize your losses if it does not work out. Say the price went down to 0.7936 – 0.7980 and you decided to close the trade.

Working out how much you lost is done in the same way. Your bet was placed at 0.8321, and it closed at 0.7936. That means you lost 0.0385 which for your chosen stake means you lost £.96.

For a second example of spread betting on Ortac, assume that you have decided that the price will fall. The price is low start with, so even a large percentage drop will need a large stake for you to see much profit. You must be careful if considering this, because the up side is not limited in the same way, and could cause you to lose more than you want. Say you decided to place a short bet for £60 per point, this bet would go on at 0.8279. Perhaps the price would drop to 0.5184 – 0.5226, and you close your bet to collect your winnings.

The bet went on at 0.8279, and closed at 0.5226, which means you gained 0.3053. Multiplying this by your stake of £60 per point, you have won £18.32.

Once again, you must accept that many of your bets will go in the wrong direction, and one of the secrets of spread trading profitably is that you minimize your losses by closing the bet quickly. Perhaps in this case the price goes up to 0.9572 – 0.9616 and you decide that you have to close the trade.

The bet went on at 0.8279, and closed at 0.9616, a difference of 0.1337. Multiplying by your stake, you have lost a total of £8.02.

One response to this entry

  • Kremnica Beyon Gold Says:

    We are civil association of Kremnica Beyond Gold and we are fighting against mining in our town by Ortac resources.

    Please read our letter to shareholders of Ortac:

    Dear Madams and Sirs,

    Since your company is listed on the Ortac Resources Ltd. website as one of its shareholders, we would like to inform you about certain facts Ortac Resources Ltd. keeps away from its shareholders.

    The above-mentioned website provides details about Ortac Resources’ intentions to build a gold and silver mine in the town of Kremnica, information about the preparatory works on the mining project, and it even shows pictures that supposedly document approval of Kremnica‘s residents and cooperativeness of the local community.

    Underground gold and silver mining on Šturec site in Kremnica stopped in 1970 and following a brief attempt to start open pit mining between 1986 and 1992 it was completely closed down.

    Between 2005 and 2007 Canadian company Tournigan Gold Corp. sought to develop a project of open pit mining on this site, however, in face of fervent resistance of local residents and Slovak public opinion it had to give up on the project. People of Kremnica founded a civil association called Kremnica Beyond Gold (Kremnica nad zlato) – its members include more than 50 % of all adult population of Kremnica and other sympathisers from across Slovakia, many of whom are prominent figures of cultural and social life. In 2006, the municipal government of Kremnica adopted a resolution declaring a firm NO to gold and silver mining in Kremnica.
    Nowadays, Ortac Resources Ltd. is trying to revive the mining project. It made its intentions public in 2011 immediately facing strong opposition from the local community. In a very short time in November 2011 signatures of more than a half of all adult residents of the town were collected confirming stable negative public response to the project. Moreover, the municipal government adopted another resolution clearly refusing gold and silver mining in Kremnica, where all elected members of the municipal government univocally approved the resolution.

    You are probably not aware Kremnica is a historical town rich in cultural heritage, and it is one of the most ancient territories declared an Urban Conservation Area, while the adjacent territories are listed as Conservation Area (according to the project concerned, mining should take place in the Conservation Area). There are 169 cultural monuments on the territory of Kremnica. The historical mint on the main square included in the European Cultural Heritage has been coining money continuously since 1328. It is inconceivable to create an open pit in Central Europe about a kilometre away from the main square of such historical town. Kremnica has similar value for Slovaks as York has for the British.

    In addition, extraordinary natural riches surround Kremnica — in 2011 the European Commission awarded Kremnica with the title of Capital of Biodiversity.
    We enclose the Tourist Guide of Kremnica for you to create a picture worth a thousand words.

    This year the civil association of Kremnica Beyond Gold took legal action against the Regional Office of Environment in response to its actions regarding the gold and silver mining project in Kremnica. The court agreed with Kremnica Beyond Gold. Because of this lawsuit the deadline set by law for starting the open pit operation expired and, consequently, the company of Kremnica Gold Mining, wholly owned by Ortac Resources, lost its authorisation for open pit mining in the deposit of Šturec in Kremnica.

    On one hand, Ortac Resources Ltd. keeps this information secret from you and on the other, it refuses to reveal to the community concerned detailed information on the project and on the gold and silver ore processing technology in particular. All of this undermines Ortac’s credibility among local people. They find Ortac’s declarations that the project is environmentally acceptable deceptive; for it is clear in Kremnica that environment doesn’t only include nature but also the landscape, cultural monuments and intangible cultural heritage that should be protected by each European country as well as Europe as a whole.
    We firmly believe that Kremnica will not become another Romanian Rosia Montana or Austrian Eisenerz, i.e. towns literally emptied by their current open pit mining projects. People of Kremnica and its surroundings will do their best to prevent their town from falling to such fate.
    We maintain associating your company name with the dubious project of Ortac Resources Ltd. could be undesirable.

    Yours faithfully,
    RNDr. Zuzana Balážová, Mayor of the Kremnica Town
    Mgr. Luboš Kürthy, Chairman of the NGO Kremnica Beyond Gold

Join the discussion

The content of this site is Copyright 2010 - 2017 Financial Spread Betting Ltd. Please contact us if you wish to reproduce any of it.

Trade the markets with TradeNation! TradeNation offer tight spreads and low rollover costs! Trade responsibly: Your money is at risk. 81.7% of retail investor accounts lose money when trading CFDs and spread bets with this provider.