Over the last months, Sphere is furiously buying assets that the company considers important for its purposes. This has finally attracted the attention of promoters. Only one promoter so far, to be precise – allpennystocks.com, which has received no compensation for advertising the company.
Sphere’s activity has also helped the stock (CVE:SPH.H), (PINK:SPHUF) climb on the markets. SPH.H has moved 250% up since November, when it was traded at 0.02 per share. Yesterday, the shares finished at $0.07, gaining about 8% from the previous close.
As a whole, however, the stock has not made a notable progress recently. Since the start of the year, SPH.H has been floating in a trading range between $0.05 and $0.07.
Nevertheless, the company’s furious buying of assets continues, and there are no signs it will stop soon. We cannot help mentioning some of the important acquisitions.
Sphere gained two properties located in Nevada – Poker Flats and Ziggurat. They were acquired last December through an option agreement with Mexivada Mining Corp. and a contract with Spartan Gold Ltd. (“Spartan”).
In accordance with the agreements, the company, together with its joint venture partner Spartan, have the right to acquire an equally shared 70% interest in the two assets. Spartan is responsible for financing of the first stage exploration activities at the properties.
In January, the company signed an agreement to acquire all Global Mineral Resources Inc. claims in the Dome property in Ontario’s Red Lake’s gold district. These claims remain subject to the company’s contract with Duncan Park Holdings Corporation, known as the “Duncan Park Option Agreement”, signed in March, 2010.
Yesterday, the company informed about another strategic acquisition: under an agreement with Camp McMan Red Lake Gold Mines, Sphere acquired 100% of the Alcourt gold property near the town of Red Lake. As stated in the release, Alcourt is historically known to contain good gold grades.
It may seem nice to buy properties, but it is perhaps a different story how sensible this will turn out to be. Possessing more assets cannot guarantee you immediate success. Besides, Sphere has not made any revenue from these properties yet. Only when this happens, we could declare that acquiring all these assets was fully justified.
Finally, we should note the financial condition of Sphere Resources – it really does not look very solid. In the end of last September, the company had practically no cash. It reported a net loss of $464K for the third quarter of 2010, as well as a working capital deficiency of $6.1M.
