GEO Minerals Ltd. (CVE:GM) (PINK:GMNRF) saw some unusual attention from traders but it didn’t turn into anything special yet.
GM opened 8.7% lower today despite the promising technical setup from previous sessions. GM had added 9.5% on Tuesday generating a trading volume of 1.6 million which was more than 4 times the average turnover of 346 thousand.
GEO Minerals had no directly related recent news though, thus correction is not surprising. Until now, the stock price continued going up for the second week straight generating increasing volumes. The price is currently range-bound, swinging between 8 and 12 cents per share.
The latest available news release is dated August 31, 2011. Back then the company announced completion of the first phase of exploration at their fully owned Blackwater Deposit. Geological mapping, selected prospecting, induced polarization geophysical survey and infill sampling has been done on the property. Reports on finding are yet to be received.
While the news worked well to boost GM’s share price, currently there is nothing to keep it afloat. The company holds a market cap of $10.6 million – that’s 3 times larger than their underlying net tangible worth of $3.4 million. Such a valuation is slightly too large for an exploration stage company with no revenues.
Furthermore, GEO is constantly diluting shareholders through issuance of capital stock when acquiring funds for exploration activities. Dilution rate was 63.5% over the past year, successfully preventing the share price from increasing.
