Maybe someday, the gold fever from these days will be named “neo gold rush” or “virtual gold rush”. Opposite to the huge migration of people moving to the areas with a dramatic discoveries of gold, today, the advanced technologies allow to be a part of the rush and to profit on gold from anywhere in the world.
The virtual “migration” of investor nowadays, makes possible to benefit from the gold rush without even making a big difference and put emphasis on the facts whether mineral properties are proven, probable or indicated.
Thus, considering the new form of participation in the “neo gold rush” and the number of investors virtually rushed, makes it probably even more dramatic than the old gold fever.
Probably, these days, some investors had the same thoughts, considering an investment in Wstn Sierra Mining Corp. (PINK:WSRA). Although the fact that as of yesterday the company is not producing nor trading gold or silver, basically leaves it up to their slogan: “Over One Hundred Years of Gold and Silver Mining Heritage”, to attract investor.
On Wednesday, in a press release, Wstn Sierra Mining Corp. announced that they have received an approval from the State of Arizona to lease approximately 430 acres in Skull Valley, Arizona. Although WSRA still needs to proceed with an application for an exploration permit, which requires time and efforts, the company’s share price exploded.
In a colossal volume, which exceeded the average almost nine times, the price of WSRA spiked 51.43% just to pull back rapidly yesterday. Shares’ closing at $0.0240 and the quick paced price correction of almost 10% expressed investors’ cooled enthusiasm to support an upward trend of WSRA.
Looks like, a short term and only virtual interest in company’s stock was the main driving force of the gold rush. Afterwards, based on the due diligence done on the company, investor decided, that at this time, WSRA is maybe, not the best opportunity for a long term investment.
According some experts, shares of the “ancient” Wstn Sierra Mining Corp. are underestimated. Indeed, the market value of $6.85 millions as of yesterday looks modest for a company, operating in metals & mining industry.
Still, the question remains: “What stands behind this number?”.
At the end of the last year, the gold WSRA had cash and cash equivalents of $87K, property and equipment of $22K and……. the impressive value of almost $21 million in mining property.
How fairly was the property evaluated remains an open question, since WSRA is de-registered from the SEC since April 2009. All the financial disclosures available are unaudited. Maybe, “the story” of the most valuable mineral property was also one of factors for the rapid roll down of share price yesterday.[BANNER]
In May, 2008, Wstn Sierra Mining Corp. acquired eight mining properties from Gold River Exploration Inc. in exchange for 56,555,166 shares of its common stock and $50K in cash. Than, the company determined that the acquisition should be valued and recorded on the books based on the discounted value of the reserves in accordance with SFAS 123. As a result, WSRA calculated the net value of reserves, net of estimated production costs, discounted over the recovery period and reflected uncertainties to be $18.5 million.
Two days ago, Nicholas Larkin from “Blumberg” posted: “Gold climbed to a record in London and New York for a fifth day, trading above $1,500 an ounce, as a weaker dollar and debt concerns boosted demand for the metal as an alternative investment. Silver rose to a 31-year high.”
In this row of thoughts, there is nothing strange, that even shares of Wstn Sierra Mining Corp. succeeded to explode these days, though driven by the virtual interest in a gold.
