trading over 1 million shares on the market and advancing up progressively. However, the reason for the climb is yet not clear and investors’ curiosity is rising up.The latest news from Golden Phoenix came up last week, when GPXM reported it has entered into a Note Settlement on February 10 with David A. Caldwell, one of the company’s former officers and directors. Mr. Caldwell has elected to convert a portion of the outstanding note into shares at a rate of 16.7 shares of the company’s common stock for each $1.00 of principal and interest being converted.
The news being reported, nothing more was to follow on Golden Phoenix, though the stock got the climb. Yet, it is not certain what will be its next move.
Golden Phoenix is focused on Royalty Mining in the Americas with gold, silver and molybdenum projects in the United States, Canada and Peru. At the beginning of this month, the company published some positive news, reporting that its joint venture partner Scorpio Gold has started a 13,167 meter drill program at Mineral Ridge Gold Project in Nevada. Regarding the project, Mr. Tom Klein, CEO of Golden Phoenix, stated that the drilling of these properties is expected in the second half of this year. This announcement gave a little advantage to GPXM, though it lasted only for a day.[BANNER]
According to its quarterly report, the financial condition of Golden Phoenix is quite disturbing. By September 30, 2010, the company’s liabilities are almost 50% higher than its total assets and the stockholders’ deficit is over $830 thousand. The most shocking fact, however, turns out to be the accumulated deficit of GPXM, which exceeds $43 million.
As the company has no sources of operating revenues and its losses have been increasing, it will require additional capital to fund its operations and pay its obligations. However, if Golden Phoenix is unable to do this, the company may be forced to significantly reduce or terminate operations and file for reorganization or liquidation under the bankruptcy laws.
