Elray Resources stock rose 5% yesterday and the market closed at $0.105. As already mentioned, the real event was the volume: 3.57 million shares were traded, a value 24 times the average and unprecedented over the last three years. It is hard to say what caused it, the press release from yesterday, the one paid promoter, or the additionally piling investor alerts.
The press announcement made by Elray Resources yesterday was a general one and could have been made by any company engaged in any kind of mining. It pointed out facts provided by other institutions about Ecuador’s mining sector as “a major engine of growth”, but did not mention a single word about how Elray in particular plans to profit from that. The promoter on the other side, received $15,000 in cash and had thus at least a quantifiable reason to see price appreciation for the stock.
The fact that Elray continues cutting its costs should not provide for joy among investors. Because it can only mean the company does even less exploration than before. Nothing has changed on the balance sheet as well since inception in 2006. Which makes it even more questionable what made yesterday Elray’s management so happy about the recent good prospects in Ecuador’s mining sector, since their interest there seem to have remained a matter of good intentions.
End of March this year the company owned a 100% interest in a gold and copper claim in Cambodia, as well as a Letter of Intent to acquire 99% interest in a gold property in Ecuador, subject to exchanging shares with the current owner and to the payment of $800,000 before June 14, 2010. Since then, nothing has been heard about the deal.
The further financial facts about Elray Resources, Inc. were end of March as follows:
- No revenues since inception
- Barely any costs
- $82,000 in assets
- $121,000 in liabilities, from which $104,000 “Loans from shareholder”
