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Penny shares usually carry larger danger than blue-chip firms. It is 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% larger within the final yr.
Constructive 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. Subsequently, it doesn’t come as a lot of a shock that the rally has been induced by the potential for ongoing tasks to maneuver in the direction of a extra business stage.
For instance, an enormous soar got here in August. Orosur reported robust high-grade gold drill outcomes from its Pepas prospect on the Anzá venture in Colombia. These outcomes had been interpreted as progressing Orosur nearer to issuing a NI 43-101. It is a authorized instrument setting requirements for public disclosure of mineral tasks by issuers. For traders, this can be a key valuation catalyst for junior gold explorers.
An replace in October confirmed issues had been progressing properly. 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 yr, which helped Orosur, as a result of any venture the place gold’s to be discovered is all of the sudden 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 instantly helped the share value.
The view for 2026
If Orosur efficiently completes a NI 43-101 useful resource estimate for Pepas (or one other prospect), that’s a serious milestone that usually re-rates exploration shares. Put one other means, if a venture considerably will increase in worth, then the share value ought to comply with go well with. We’ve seen a few of this already in 2025, however there’s nonetheless a big potential for additional beneficial properties in 2026 for the penny inventory if this occurs.
I additionally assume that the commodities increase isn’t near being over. I imagine gold costs may preserve rallying, based mostly on continued geopolitical concern and common financial uncertainty.
After all, I’m not pretending Orosur isn’t a really high-risk penny inventory. It isn’t producing income in the intervening time, so it’ll all the time should refinance and lift capital by the inventory or different markets to maintain going. Sooner or later, it’ll have to begin earning money in any other case funding will dry up, and the corporate may go bust.
One other danger is that the rally‘s being fuelled by optimism round tasks, somewhat than concrete actions. Sentiment can shift very quick with penny shares, which means {that a} sharp share value drawdown can’t be dominated out.
Even with these considerations, I feel it’s a inventory to contemplate for traders who perceive the dangers and are comfy with them.
