Probably, such is the case with Evolving Gold Corp. (TSE:EVG), (PINK:EVOGF). Having recently announced a company transformation, Evolving is now facing a downfall of its shares on the Toronto Stock Exchange (TSE).
For a week EVG has been declining, though at a slow pace. Since Mar. 3, the stock has descended by approximately 8%. At the same time, the volumes remain humble, as usual.
The low turnovers are typical for the trading of the stock on the TSE. Over the last month, the highest realized volume was just 450K shares. It seems EVG is not in great demand by investors on the Canadian market. Perhaps, this is something that the company’s directors will need to improve in the future.
A week ago, the corporation informed about the completion of dividend-in-kind spin out transaction involving the transfer of the company’s option to acquire the mineral claims forming the Kiyuk Lake gold property to a new company named Prosperity Goldfields Corp. (“Prosperity”).
The record date for the deal was Feb. 16, when each shareholder of Evolving Gold received one Prosperity share for every ten shares held. The company states that the fair market value of Prosperity stock is $0.15. Evolving expects to hold approximately 48.5% of the outstanding Prosperity shares.
Investors do not seem to be greatly impressed by the news, or perhaps they are a bit surprised and need more time to digest it. This might be one reason for the recent pull-back in the company’s share price on the market.
On the other hand, the company looks financially stable with $13.8M in cash and a positive working capital of $12.6M at the end of 2010.
However, there are worrying negative trends too: the net loss for the last quarter of 2010 was $1.98M – 77.5% larger than for the corresponding quarter of 2009.
