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EnigmaDude (60.92)

Golden Minerals - what sort of nugget is it?



October 26, 2010 – Comments (2) | RELATED TICKERS: GOLD

Golden Minerals is not currently rateable on CAPS - I stumbled across it on one of the blogs on the MF discussion boards.  The stock was plodding along in the $5-7 range until about a month ago when it suddenly took off.  Now trading at $25 there is at least one analyst who gave it a target price of $100/share!  They later reduced the target to about $85, which is still substantially higher than it is trading today.

They just closed a dilutive offering at $18.50 and concurrent with the public offering, the Company closed a private placement with its largest stockholder, The Sentient Group, of an additional 1,190,031 shares of common stock at the public offering price of US$18.50 per share.

So can anyone tell me whether this really is a gold mine waiting to be discovered, or some sort of wild pump and dump scam?  Sinch?  Bueller?  Anyone?

2 Comments – Post Your Own

#1) On October 26, 2010 at 4:41 PM, EnigmaDude (60.92) wrote:

I forgot to mention that the ticker symbol is AUMN.  And they are based in my home town of Golden, CO, also known as the home of the Colorado School of Mines.

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#2) On November 01, 2010 at 8:41 PM, EnigmaDude (60.92) wrote:

OK - did more research and here is what I found:

 1. Apex Silver (was SIL) filed for bankruptcy and "re-emerged" as Golden Minerals in March 2009.  Jeffrey Clevenger remains as CEO.

2. The El Quevar silver tract is in Argentina and "could" be huge, however, the country is not one of the most friendly toward foreign mining companies.  Apex Silver had a history of big promises (opening new mines), but never delivered.

3. As recently as a month ago they took on more equity financing to fund their exploration activities.  Here is a link to more about this:

Finally, here is what one blogger had to say:

 Golden Minerals is now up 10x from where we originally featured the company (and up about 3 times from the level where we eventually sold the last of our position). There are few opportunities that are as certain as Golden Minerals trading at $2 with more than $8 per share in cash (as it did in June 2009), but this is a company that doesn’t like holes being burnt in its pockets — so it was quick to spend what it had on holes in the ground and is now on its second major financing during the past year. The current value of the company is primarily due to the bonanza silver located in the central and western Yaxtche zone at its El Quivar project in Argentine but the opportunity is no longer as certain. As noted previously, the company is doing the right thing by re-evaluating its initial proposal to build a low tonnage, low grade mine at El Quivar and we look forward to reviewing the results of the preliminary economics. Until then, we congratulate the patient shareholders who have held since those early days of certainty and wish them continuing success.

I think I will keep watching for a while, even if the stock is up 300% in a year!

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