We spoke about Lone Star Gold Corp. (OTC:LSTG) just before it started trading actively on August 15. The company was promoted in several paid newsletters back then. It has had some more promotions since then.
This far, approximately $200 thousand have been spent on promoting LSTG. After reaching a peak on a rumor on Aug. 22, LSTG has been swiftly dropping back. On Friday, the price fell 6.60% and reached $0.99 at the close with 181 thousand shares changing hands through the day.
The rumor that gave LSTG the most substantial boost was provided by the promoter with the highest disclosed compensation. The promoter stated LSTG was Goldcorp’s “logical next acquisition.” LSTG itself hasn’t made any claim that Goldcorp has interest in it.[BANNER]
This statement was not backed up by much. Other than the fact the La Candelaria project is near to Goldcorp’s El Sauzal mine, there isn’t anything factual to support the idea Goldcorp would acquire LSTG. It shouldn’t have been a big surprise the Aug. 22 gains didn’t last through the following session.
Today, there is yet another promotion which tries to perpetuate this idea. Traders may want to keep in mind that when the El Sauzal mine was acquired it was already producing, albeit a relatively small amount of gold. Additionally Goldcorp has done nothing to indicate it is interested in LSTG in the moment.
If at some point by some chance Goldcorp decides to acquire LSTG, it would be profitable for shareholders. However, saying LSTG is an “urgent buy alert” may not have much merit.
