On the TSX Venture Exchange, the stock’s progress actually began in February but became even more evident during the first March session. Yesterday, sparked by the buyer’s power, CMA went 15% up, noting a three-year high at $0.48 on a turnover beating almost five times the average.
This surge might have been driven by several positive developments announced recently, and especially by the released yesterday financial reports for the last quarter of 2010. They indicate Cream Minerals looks financially steady: in the end of December, 2010, it had a working capital surplus of $4.15M and a stable cash position of $5.55M.
Besides, in early February, the company commenced a 10 000 meter drill program at the Nuevo Mileno Silver-Gold Project. The property contains a “significant” NI 43-101 compliant silver equivalent mineral resource, as claimed by Cream Minerals.
There are, however, some unfavorable factors, that might become rather troublesome for the company in the future. They are common for many mining firms in the development stage, Cream is not the only case. Nevertheless, they deserve attention.
As Cream admits in its financial reports, it relies primarily on “equity financing to meet its capital requirements and will continue to do so for the foreseeable future. There can be no assurance the Company will be able to obtain financing required in the future on acceptable terms”.
Without sufficient financing, Cream will find it very hard to continue the further exploration and development work on its mineral properties. As stated in the mentioned reports, this raises doubts about “the Company’s ability to operate as a going concern”.
To such rather eloquent and discouraging statement, that needs no comment, we might add that Cream Minerals recorded a net loss of $1.58M for the nine months ended Dec. 31, 2010.
