Yesterday, the announced funding agreement of Auric Mining Co. (PINK:AUMY) made the company’s stock price even more volatile while the number of traded shares exceeded 34 times the daily average. AUMY offers so far only press releases, however, and no sound evidence of potential. 
During the latest trading session AUMY share price touched the bottom at first and then surged up to cross the 50-day moving average just before the end of the session. At market close AUMY had gained more than 56% in value, closing at $0.0072 for a share, and it had traded a shocking volume of almost 84.5 million shares – over 34 times higher than the three-month daily average.
Before the start of the session AUMY published a press release in which it announced a $20 million Financial Guarantee commitment. According to the press release, the funding agreement will be backed by certain assets of the company, and the received cash would serve the increasing of the potential scope of AUMY recent acquisitions and partnerships.
As AUMY is not filing with the SEC, it is evident that its stock trades solely on news and promises. Moreover, yesterday’s PR mentions that the funding will be subject to further negotiations and guarantees. AUMY claims become even more questionable when the company’s latest financial report is taken into account.
According to it, AUMY business is to invest in mining and natural resource projects, and that the current focus is on properties in the Wawa area of the Sault Ste. Marie Mining District in Ontario. At the same time, AUMY balance sheets shows that its total investments in mining claims are valued at $61,000 as of December 31, 2011, and that the company only has revenue projection but no current source of cash apart from the sale of common stock.
Although AUMY shares look cheap and attractive for trading, traders should try to find out what guarantees this company can provide for a $20 million funding commitment to actually take place, and eventually allow for growth opportunities and benefits to shareholders.
