Yesterday, the downtrend suffered by Bridge Resources Corp. (CVE:BUK), (PINK:BUKRF) stock was confirmed. Two days ago, the company announced the lack of strategic alternatives to solve its financial problems, which made the share price collapse.On the TSX Venture Exchange, the shares of Bridge Resources Corp. were one of the “leaders” these days, taking in consideration the trading volume, and unfortunately the rates of the share price decline.
During the trading session yesterday, BUK price slipped 25% down between the sessions on a five times the average for the company trading volume. Though the minor share turnover as compared to the 12.6 million volume this Monday, BUK closed the market at $0.075 per share, replacing the 52-week low from the previous day with another lower one.
The American OTC market was also dominated by the strong bearish mood of investors. The “Grey” BUKRF stock rolled down and brought a 30.79% loss in the value of the shares.
At the end of last month, Bridge Resources Corp. announced its not very optimistic financial reports for the three and six months ended September 30, 2010. The company reported a deficit of $101. 6 million, resulting from continued losses, along with negative working capital of $7.05 million.
Maybe there were a few positive messages in the above mentioned financials of the company. One of them was that the maturity dates of the long-term debt are in three years. And the other one was that BUK was at the end of September in compliance with its financial and operating covenants.
This Monday, Bridge Resources Corp. announced in a press release that the proposed cash component for the divestiture of its wholly-owned subsidiary Bridge North Sea Limited will not allow full repayment of BUK’s outstanding debt, and that the management is looking for other better alternatives.[BANNER]
Despite all the facts, a short preview of the company’s assets and operations convinces that BUK still has some growth potential and that the value of its shares was maybe underestimated these days. Bridge Resources Corp. has a 50% interest in approximately 100,000 gross acres in the Western Idaho Basin in the U.S. and has drilled nine wells in Idaho. The company’s North Sea Gas Area blocks cover over 579 square kilometers.
Two years ago, BUK began operating its Durango well in the UK North Sea Southern Gas Area. For the development costs of this project BUK negotiated a long-term debt with the Royal Bank of Scotland.
