SMNG closed the session at $0.15 for a share and the total increase in the share price was 76.47%. The trading volume was by far the highest since the stock is publicly traded and exceeded 4.53 million shares. The reason for the explosive gain is most probably the press release of the company from the early morning. Strategic Mining announced that it has completed the acquisition of 51% of the Nat Son gold property in northern Vietnam from its joint venture partner Ba Dinh Minerals JSC.
A binding agreement was mentioned already in the company’s latest 10-Q report, filed at the end of last month. There, it is also stated that the company has acquired an exploration and mining permit for the property and that the exploration interest is based on the presence of gold-silver bearing quartz-arsenopyrite veins. Yesterday’s announcement said that gold mineralization has been confirmed by a geological survey. An additional detail that impressed the market was also the company’s statement that it intends to move immediately with the exploration and development.
Though, some further facts make SMNG rise does not look like it could hold. Two stock promoters recommended the stock through their newsletters yesterday. One received $10,000, the other one expects to get $15,000 for the service. Further on, a third party that probably holds shares and plans to sell them out on the market paid for both promotions.
A problem is also that Strategic mining has no cash to conduct its operations. At the end of September the company had working capital deficit of over $11 million, and debts that also seem to hide dilution risks. In the three months ended September more than 2.65 million shares were issued for the settlement of debt.
