The stock was extremely active after the news related to discovery of more gold reserves and the $1.5 million received upon sale of Pershing Gold's entire stake in Valor Gold. This is because the increase in expectations regarding the reserves may help increase the potential value of the company. That, in turn, may increase investor interest. These two things put together, increases the probability of the company meeting the promise of starting production in 2014. If that happens, that will be a major transition. The outlook of the company will change as it moves from being a pure development stage company to a producer. The valuations and the possibilities regarding funding for future operations will also expand. The cash flow will also change the way hte balance sheet looks. But to reach that stage, it has to find funds for the intervening period. Sale of stake in Valor Gold and the existing cash with the company may be sufficient to take it to that point, but it is better if it finds some strategic investor to speed up the start of production. The shareholders will become more confident about the prospects of the company as soon as some outsider shows serious interest in the company. The target for the first year was earlier given at 50,000 ounces of gold which itself indicates good cash inflow. The cost of production and the prevailing sentiments at that time will determine the profitability of the venture. The stock has remained a little quiet after a period of excitement. It did not lose ground on Friday despite fall in other gold stocks. Real strength may come after there is some major news regarding production or investment. Hopefully, some follow up buying will emerge next week to make the stock stronger.
I wonder when the next news will be? im guessing later in July with some more drill results. I dont see any financing stuff coming out. Buyout? probably not at this point. Its a catch 22, Right now not tha trich in ounces, if they prove they ahve more CDE wont spend a few 100 million on them. Looks like a longer road for now. Good new? no big boys selling and gold seems to have stabilized but thats where i'll save my "hopes'-on stable gold/silver prices. Silver is getting scary for miners and gold isnt too far behind.
Excelent read ,Thank you for writing such a great straight to the point post..We will start to see a turn around real soon,Serious long Investors are beginning to take notice ,We are now looking at apx,6 months,, Get in now while the price is cheep,, It will only be going up REAL SOON !!,, I know i have upd my shares and continue to do so.