GoldSpring Inc. (OTCBB: GSPG)
GoldSpring Inc. (GSPG) engages in the development, exploration, mining and sale of gold, silver and copper in Nevada. The Company has interests in the Comstock gold and silver exploration and test mining project and the Como mineral Claims in Storey and Lyon Counties; the Big Mike Copper Project in south of Winnemucca in Pershing County; and the Gold Canyon and Spring Valley in Lyon County. It also holds 100 unpatented mineral claims in Storey County and eight unpatented mineral claims in Lyon County, as well as owns title to 40 acres of land in Storey County.
Formed in mid-2003, GSPG is based in Virginia City, Nevada.
Financial Summary
As an emerging company, GSPG seeks expansion through the acquisition of additional mineral properties in the Comstock Lode District. Revenues for 2008 fell 100% from$396,000 in 2007 to $0.00, year-on-year; net income dropped 271.58% from a loss of $4.44 million in 2007 to a larger loss of $16.49 million in 2008. In 2008, the Company increased its cash reserves by 84.57%, or $148,000.
Cash Flow from Financing totaled $5.37 million or — of revenues. In addition, the Company used $4.51 million for operations while cash used for investing totaled $710,000. The Company uses little or no debt in its capital structure.
GSPG secured $1.52 million in 2008 and $950,000 in the first quarter of 2009 through private placements in an effort to advance its drilling, permitting and mine design programs.
Analyst Consensus
There are currently no analysis and research available at this stage of Company’s development.
Investment Highlights
Formed in mid-2003, GSPG has focused its efforts on its extensive, contiguous properties in the Comstock Lode District in Nevada. It has secured permits, built an infrastructure and brought the Plum exploration project into test mining production within a year of its acquisition.
As an emerging company, GSPG is looking to build on its success through the acquisition of other mineral properties in the Comstock Lode District with reserves or exploration potential. The Company’s objectives are to increase reserves through exploration and acquisitions, expand its footprint in the Comstock, resume mining, optimizing production and maximize shareholder value.
In December 2007, the Company commenced an exploration program on its Comstock Lode property. At that time, the Company has also assembled a team of mining industry experts to oversee its exploration program. It allocated a budget of $2 million to explore and develop its claims at the Hartford Complex.
The Company has drilled a total of 33 holes in its exploratory program through April 2008 at the Hartford Complex, with better assay results than the grades yielded during 2005 and 2006 production.
On January 2009, the Company acquired the Dondero property, located 1.5 miles south of its Hartford Complex, expanding the Company’s land position at its Cornstock Project.
In the first quarter of 2009, a modification application to the Water Pollution Control Permit was submitted to the Nevada Division of Environmental Protection. The permit modifications highlight the Company’s newly designed processing facilities that will optimize recovery of the recently discovered mill-grade gold and silver ore at the Hartford Complex.
GSPG looks forward to realizing a great project. In a mineral declaration report, the company estimated its Hartford/Lucerne complex near Virginia City contains reserves of more than 20 million tons of ore with 564,000 recoverable ounces of gold and 5.8 million ounces of silver, with an estimated value of the precious metals at $604 million at today’s prices.
Advancing it mining project, GSPG announced in May it entered into a definitive agreement to receive up to $2 million over the next four months from existing, long-term institutional investors, which will provide the Company with additional working capital, according to CEO Rob Faber.
With the goal of further defining assets and increasing shareholder value, the Company says drilling will continue in the near term before it shifts its focus to production.
Technical Analysis
GSPG has been relatively stable recently. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, GSPG is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.
GSPG is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.
GSPG’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.
Comparative Analysis
The Company has a negative Return on Assets of -523.18%, compared with a 3.84% industry average.
Comparable Companies: Argentex Mining Corp. (AGXM), Bullion Monarch Mining Inc. (BULM), Eastern Goldfields Inc. (EGDD), Freeport-McMoRan Copper & Gold Inc. (FCX), RTP Rio Tinto plc (RTP), Gemini Explorations Inc. (GMXS) and Newmont Mining Corp. (NEM).
Median
Insider Trading Activity
NET SHARE PURCHASE ACTIVITY
Insider Purchases – Last 6 Months
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Sales N/A 0
Net Shares Purchased
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Total Insider Shares Held 1.29B N/A
% Net Shares Purchased
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Net Institutional Purchases – Prior Qtr to Latest Qtr
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Data provided by Thomson Financial
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