See how a company's share price has historically reacted to each type of announcement — drill results, financings, resource updates — measured at one, five and twenty trading days after the release.
Junior mining investors spend a great deal of energy anticipating catalysts — the drill result, the resource update, the study — on the assumption that a good one will move the share price. The assumption is rarely tested against the company's own history.
It should be, because the answer varies enormously between companies. Some stocks reliably move on drill results and ignore everything else. Some barely respond to anything, because the shareholder base is inattentive or the float is too tight to trade. Some sell off on any announcement at all, which usually means the market expects every release to be followed by a financing.
This is an event study. For each type of announcement, it measures what the share price actually did afterwards across the company's own history — turning “drill results should move this stock” into a measured average.
By catalyst type is the core of it: average price reaction grouped by the kind of announcement. The comparison between types is what matters — a company whose drill results move the price 8% while financings move it -4% is telling you how its shareholders think.
One, five and twenty trading days capture different things. The one-day figure is the immediate reaction, which on an illiquid stock can be an artefact of a single trade. Five days shows whether the move held once the initial excitement passed. Twenty days shows whether it was a genuine repricing or a spike that faded.
The relationship between the three is often more informative than any one. A large one-day move that has entirely decayed by day twenty describes a stock that gets traded on news rather than held on it.
Sample size governs how much weight any of this deserves. An average drawn from three events is an anecdote.
The encouraging profile is a positive and durable response to exploration results — a move at day one that is still largely intact at day twenty. That describes a shareholder base paying attention to the geology and repricing the company when the asset improves.
A negative average response to financings is normal rather than alarming; dilution is genuinely bad news for existing holders. What matters is the magnitude. A stock that falls heavily on every raise has a shareholder base that fears dilution more than it values the exploration the money funds, which makes each subsequent raise more expensive.
Muted responses across every category are the least attractive pattern. A company whose share price does not respond to good news has an audience problem, and no amount of drilling fixes it until someone is watching. That is often a liquidity condition rather than a company one.
Each classified press release is matched to the company's price history, and the return is measured from the release date to one, five and twenty trading days afterwards — not calendar days, so weekends and holidays do not distort the windows. Results are averaged by announcement type over a window of between 90 days and three years, defaulting to one year.
A method for measuring how an asset's price reacts to a particular category of event, by looking at returns over fixed windows following each occurrence and averaging across them. Here the events are press releases grouped by type, and the windows are one, five and twenty trading days after publication.
Because they answer different questions. One day captures the immediate reaction, which on a thin stock can be a single trade. Five days shows whether the move survived the initial excitement. Twenty days shows whether the market genuinely repriced the company or simply traded around the announcement before drifting back.
Because financings dilute existing shareholders, and that is legitimately bad news for them. A modest negative reaction is normal. A large one indicates a shareholder base that fears dilution more than it values the exploration being funded — which tends to make each subsequent raise more expensive.
Only loosely. It describes how this shareholder base has behaved, which is genuine information, but shareholder bases change and samples are small. A stock that ignored news for two years can reprice sharply once it attracts attention. Treat it as a description of the past rather than a forecast.
No. Announcements are grouped by type, not by whether the content was favourable. A weak average reaction to drill results may mean the market is inattentive, or it may simply mean the results have been disappointing. The tool cannot tell you which.