A downtrend for SILA has established since the end of July and the latest disclosed promotions at the beginning of this month could not make the reversal. Now, SILA stock continues being promoted, this time under cover and without an official disclosure.
Yesterday, an online message board announced some takeover speculations, suggesting that the pumps are about to start over again. According to the forum posts, alerts on SILA have been sent out once again and these advertising events have cost $778,000. On Friday, SILA closed at $0.719, still a tiny 0.56% increase from the previous day and on still high trading activity.
According to the company’s financial reports, the lack of cash has been a major reason for the inability to commence any operation so far. In May this year, SILA signed a Share Issuance Agreement with an institutional investor for the issuance and sale of shares for proceeds of up to $7.5 million. Under that agreement, the shares should be issued upon individually executed subscription agreements.
The first one of these agreements was filed at the beginning of this month. The investor has agreed to purchase 375,000 units at a price of $0.80 each, whereby a “unit” consists of one share of SILA common stock and one-half of a warrant. One whole warrant gives the investor also the right to buy one additional share at a price of $1.20. The gross proceeds for SILA were $300,000.
Shortly after that, SILA naturally informed traders that it now plans to start first exploration and sampling on the La Escondida property. In the SEC filing it has not been mentioned for what exactly the raised $300,000 will be enough, as the costly La Escondida project requires a cash payment of $765,000 solely for the exercise of the purchase option.
If someone actually paid $778,000 to promote SILA stock, the question arises what a profit could be expected from the La Escondida option, so that the stock promotions look currently like a more attractive investment for the one that pays for them.
