posted
I don't think the ceo would come out with this disclaimer if it wern't true...sec would be all over it....TORONTO--(MARKET WIRE)--May 10, 2006 -- Metro Gold Mines Mineral Resources Inc. (Other OTC:MGMX.PK - News), a growing gold mining company engaged in the acquisition and development of production properties in South and Central America, wishes to provide shareholders with an update on the company's progress and address questions regarding share price, spam emails sent without company authorization, and the status of its listing on the Pink Sheets. ADVERTISEMENT
First, MGM Mineral Resources would like to confirm for shareholders that there has been no material change or event to cause the recent slide in its share price. The company is working diligently to accomplish the objectives outlined in its business plan. In fact, MGM Mineral Resources is reaching certain milestones ahead of schedule.
IP: Logged |
posted
Colombia, the Gem of MGM The reign of Anglo Andean Mining was brief and silent. Unlike its predecessor, Anglo Andean did not issue press releases announcing new ventures. It did not disclose the identities of its officers, management team or principal stockholders. It did not reveal any business plan. Perhaps it did not have enough time. By the end of April 2006, Anglo Andean Mining had been transformed into Metro Gold Mines Mineral Resources, Inc. (MGM to its friends) and the public relations machine was back at work.
MGM describes itself as a "new and promising company dedicated to mining and committed, not only to a successful venture, but with social and environmental responsibility." The Company says that it wants to be a "world class mining company" and will target Latin America, North America and Europe. For now, however, the Company's Business Plan focuses on the potential for developing mines in South America in general, and Colombia in particular. MGM's "initial mine" called ""La Esperanza," is located in Segovia, Colombia. Despite its South American connections, the Company has now moved its offices in the opposite direction - from Santa Fe Springs, California to 300 Tanbark Road, St. Davids, Ontario, Canada.
The Company, which states that it needs $1.5 million to expand operations, claims that it will begin to export gold by mid-2006. MGM's financial condition remains a question mark. The Company has not published audited financial statements. Fortunately for investors, the Pink Sheets now contain a modest amount of information on the Company. They identify MGM's CEO as Jairo Antonio Girardo and its President as Kenneth Lamb. Some of the information provided by the Pink Sheets is somewhat less clear. According to the Pink Sheets, the Company had issued 800 million shares as of February 14, 2006 (180 million of which were in the public float) - although it only was authorized to issue 400 million shares on that date.
MGM has not wasted any time getting its public relations machine in gear. On May 1, 2006 the Company issued a press release, announcing that shares of MGM had begun to trade on the Pink Sheets. The Company explained that it would concentrate on the development of precious metal mining companies but offered no immediate insight into its history, operations, level of success or finances. The Company said that it would focus initially on the development of properties in South America and hoped to develop operations that would yield profits while also paying attention to workers' well-being and environmental concerns.
The press release did not address the name change from Anglo-Andean mining, or provide any insight into the terms of that transaction. In fact, a number of key questions remained to be answered. Had the owners of MGM acquired control of Anglo-Andean? If so, what had they paid and to whom and what had they received in return? Are there now more than 800 million shares of common stock outstanding? Has the Company's certificate of incorporation been amended, and, if so, how many shares are now authorized? Who are the Company's principal shareholders and how did they acquire their stock?
The May 1st press release did provide an overview of the Company's new management team. It explained that Kenneth Lamb, MGM's President, has a sales and marketing background, has managed several "innovative" companies and served as a Professor of Academics for over twenty years. The Company did not identify any of the entities with which Mr. Lamb previously was associated or the educational institutions at which he served as a professor.
The press release offered a somewhat more fulsome picture of the Company's CEO, Jairo Giraldo. According to the May 1st release, Mr. Giraldo has a background in mining engineering, graduated from the University of Colombia, was certified in mining management by the American Management Association, worked for over ten years with the Ministry of Mines and Energy in Colombia, has served as an adviser to the Colombian government, and is a specialist in emerald, gold, silver and platinum mines.
The press releases have continued to flow. As markets were closing at 4:05 pm the next day, May 2, 2006, the Company issued a press release announcing its acquisition of "La Esperanza." MGM described Colombia as the highest gold yielding country in South America, but also "the most under-explored and under-developed," and declared that "[t]here are proven multi-million ounce deposits of rich gold under Colombian soil." MGM said that it was "working to modernize operations and maximize profitability of La Esperanza mine"
The Company seems to be banking on location, location, location. The May 2nd press release emphasized repeatedly that La Esperanza sits in Columbia's most fertile gold production region. Still, while the Company's CEO, Jairo Giraldo said that MGM was "highly pleased with what we have seen so far," the Company offered no details, independent studies or historical results that demonstrate La Esperanza has, or is likely to, yield a substantial amount of marketable gold.
MGM must have been pleased with the May 2nd press release. It issued a second release, repeating virtually verbatim the contents of the previous day's announcement, at 9:15 am on May 3rd just as markets were set to open. What followed was impressive. Almost 20.7 million shares were traded on May 3rd, as prices bounced from 8 ½ cents to 13 cents before closing at slightly more than 9 cents a share. Could the vague set of press releases which offered no comfort concerning the viability of the Company or La Esperanza have precipitated this stampede? Or was there more?
There was this. At 7:00 am on May 3rd, sandwiched between the twin La Esperanza announcements, an outfit called IO Circuit recommended MGM based upon a "$.24 price target from Market Advisors." This press release, like those issued by the Company, noted Columbia's potential as a gold producing nation, and repeated the mantra that La Esperanza was located in Columbia's richest gold producing region. A second press release, issued 10 minutes later, urged investors to "have a look at Metro Golden Mines Mineral Resources."
Who was behind the sudden hype? Growth Stock Alert, an Internet promotional tool owned by an entity called Iron Consulting, had been paid $16,000 by Equity Alliance Int. LLC "for its marketing and consulting services." The report offered no fresh insight; it merely regurgitated information from the Company's press releases and website and reiterated the potential for gold production in Columbia. It provided no details of the Company's operations, history, or financial condition. Nothing that would remotely support a $.24 cent price target or the monsoon of trading that followed.
The daily press releases have continued. On May 4th, MGM announced that a new lead geologist had been appointed to oversee operations at La Esperanza. Again, the Company seized the opportunity to remind readers of Colombia's gold producing potential. And the promoters were back at it as well. An outfit called Stock Market Alerts LLC issued an early morning press release extolling the virtues of the Company, La Esperanza and the prospects for gold mining in Colombia. Stock Market Alerts was paid $5,000 to promote the Company by an entity identified only as Equity Alliance International LLC. Growth Stock Alert, which issued its glowing report earlier in the week, joined in, sending out another press release touting MGM. Growth Alert concedes that it was paid $895 by an unidentified third-party to distribute the good word about MGM.
Once again, trading of MGM shares was brisk but the results were distressing, particularly to those public investors who bought into the hype of the past week and paid up to 13 cents a share. Almost 23 million shares changed hands on May 4th, but prices plummeted by more than 50%, closing at around 4 cents a share.
With 800 million shares issued (at least according to the Pink Sheets), MGM's market cap has varied widely in recent days ranging from more than $80 million to about $32 million at May 4th's close. How much is this Company worth? Is "La Esperanza" as fertile as Sutter's mines? Or have we just witnessed a frenzy of activity fueled by unrealistic expectations and calculated to benefit as-yet unidentified individuals who held millions of the Company's shares and welcomed an opportunity to dump them. The Company certainly has made a splash. Will investors be left treading water?
posted
Well, it's an opinion and you know what they say about opinions... everyone has one ..that's what makes a market ...that's why there are bulls and bears... the fact is that gold and precious metals are at all time highs and if MGMX has the reserves they claim the stock is worth a lot more than it's trading for at these levels.. appears to be some heavy shorting here and looks ready for a technical bounce imo... good luck
IP: Logged |
posted
This is great things with pinksheets are solved and now they can start moving forward I was surprised to hear they were already pulling gold out of the ground.
IP: Logged |
UBBFriend: Email this page to someone!
Printer-friendly view of this topic
![[Wink]](wink.gif)
for today I would say we will see again 25% up
