Last week, Lone Star Gold, Inc. (OTC:LSTG) failed to make a break out on its over $300,000 worth promotional campaign that was additionally accompanied by an exploration program update. This week, things have not been much better, at least LSTG got some more trading volume and maybe starts getting popular among traders. 
Yesterday’s session closed with a 2.75% increase of LSTG share price at $1.12 for a share. Trading volume was lower than on Monday, but still it is larger than the average – almost 627,000 shares got traded during the day. Maybe the market value of LTSG shares, which is now at over $129 million, is considered by traders high enough for any large jumps of the share price to happen.
On Monday, Lone Star Gold announced in a press release to have signed a letter of intent a few days before that to acquire an option to purchase a 70% interest in a new gold and silver project. That new project of the company is located in Mexico and consists of two mining properties named San Luis and La Colorada. Although the press release stated potential proceeds from sliver and gold production from the properties of $10 million per year, the market did not respond with a lot of excitement.
At the end of June 2011, LSTG had only $12,000 in cash and equivalents, but the company has an Investment Agreement on place under which it can raise up to $15 million through the sale of common stock. Thus, potential dilution is an important issue to be considered when buying LSTG shares as a long-term investment.
