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Penny shares usually carry greater danger than blue-chip corporations. It’s because they’ve a a lot smaller market-cap (sub-£100m), so even comparatively small purchases or gross sales can set off sharp volatility.
But the chance might be massive. Right here’s one I noticed that’s rocketed 246% greater within the final 12 months.
Optimistic sentiment
I’m speaking about Orosur Mining (LSE:OMI). The gold exploration and mining agency has operations primarily in South America, together with Uruguay and Chile. Due to this fact, it doesn’t come as a lot of a shock that the rally has been induced by the potential for ongoing initiatives to maneuver in direction of a extra industrial stage.
For instance, an enormous bounce got here in August. Orosur reported sturdy high-grade gold drill outcomes from its Pepas prospect on the Anzá undertaking in Colombia. These outcomes had been interpreted as progressing Orosur nearer to issuing a NI 43-101. This can be a authorized instrument setting requirements for public disclosure of mineral initiatives by issuers. For traders, this can be a key valuation catalyst for junior gold explorers.
An replace in October confirmed issues had been progressing nicely. A survey confirmed “gold assay outcomes figuring out a considerable, gold bearing system”.
One other issue that’s helped is the spike in gold costs all through 2025. It’s up 53% over the previous 12 months, which helped Orosur, as a result of any undertaking the place gold’s to be discovered is abruptly value much more.
Granted, the corporate isn’t on the stage of promoting the gold proceeds to grasp this profit. However the truth that the asset being mined has gone up in worth has immediately helped the share worth.
The view for 2026
If Orosur efficiently completes a NI 43-101 useful resource estimate for Pepas (or one other prospect), that’s a significant milestone that usually re-rates exploration shares. Put one other method, if a undertaking considerably will increase in worth, then the share worth ought to observe go well with. We’ve seen a few of this already in 2025, however there’s nonetheless a big potential for additional features in 2026 for the penny inventory if this occurs.
I additionally assume that the commodities growth isn’t near being over. I imagine gold costs might maintain rallying, primarily based on continued geopolitical concern and normal financial uncertainty.
In fact, I’m not pretending Orosur isn’t a really high-risk penny inventory. It isn’t producing income in the meanwhile, so it’ll all the time need to refinance and lift capital via the inventory or different markets to maintain going. Sooner or later, it’ll have to start out making a living in any other case funding will dry up, and the corporate might go bust.
One other danger is that the rally‘s being fuelled by optimism round initiatives, slightly than concrete actions. Sentiment can shift very quick with penny shares, that means {that a} sharp share worth drawdown can’t be dominated out.
Even with these issues, I feel it’s a inventory to contemplate for traders who perceive the dangers and are comfy with them.
