Affinity Gold Corp. (NASDAQOTCBB:AFYG.OB)

suck it gold!

Fool's Gold

The price of gold ($1,095 per troy ounce) is up 25% this year. But that's nothing compared with the action at Affinity Gold Corp. (AFYG, 6), whose split-adjusted shares have risen 73,000%. That gives this curious little company a market value of $312 million, or 685 times book value. The firm is only two years old and has never sold an ounce of the shiny stuff or, for that matter, brought in even a dime of revenue. In SEC filings Affinity says its main office is in the Minneapolis suburb of Maple Grove. But the speculation centers on faraway Peru, where a recent Affinity press release states that "very positive indications of gold content," and some silver, have been found in the play.

Dig deeper into SEC filings and they reveal that in January Chief Executive Antonio Rotundo paid $58,000 to buy a shell company, Syncfeed, which had tried to produce food for crab hatcheries in China. He changed its name to Affinity and then sold Peruvian mining claims his family owned to the entity in exchange for stock. A recent marketing push in Europe--Affinity's Web site offers a German version--might explain some of the price increase, which even an Affinity spokesman (in Maple Grove) agrees is a bit much. If you can locate shares to borrow, short the stock. --William P. Barrett

http://www.forbes.com/forbes/2009/1130/investing-maxim-juniper-affinity-gold-makers-breakers.html