Message #6 From:
Robert Ross Date: January 7, 2006 10:37:24 PM
Andresmin Gold Corporation (OTC BB: ADGD): All That Glitters May Not Be Gold!
Andresmin Gold Corporation (OTC BB: ADGD) is a penney-stock that has had a checkered career so far. Borne out of another failed penny-stock, Anton Dist., that had its run until it was forced to abandon its\' grandiose business plan - marketing promotional tourist maps! It remains to be seen if ADGD will suffer the same fate.
So far, Andresmin boasts an impressive website and the early makings of a metals exploration concern. The question is does this resemble another worthless penny stock w/ an idea, but without substance that is going nowhere like its predecessor? … Or is it something legitimate that\'ll develop?
The track-record so far:
On May 4, 2005, the BC Securities Commission issued a cease trade order, effective only in British Columbia, against Andresmin Gold Corporation (\"Andresmin\" or the \"Company\") (OTCBB:ADGD) because the company failed to file a required technical report. What would the technical report have disclosed that its import caused the BC Commission to bar the company\'s shares from trading in British Columbia? So far as one can tell, the securities continue to be barred from trading in BC.
On July 26, 2005, Chief Geologist for Andresmin, Mr. Luis Antonio Villena Calienes, died at the Ricardo Palma Clinic in Lima, Peru. He was only 54 years old. Apparently Mr. Villena died from lung failure having suffered for some time from lung complications. He leaves his wife Lilia and two children, Joel and Luis. Losing its Chief Geologist of the stature of Mr. Calienes is certainly a serious blow to a fledgling outfit like Andresmin. What is even more concerning, not to belittle Mr. Calienes\' demise, is whether the principals of the company knew of his illness for some time and the stocks meteoric rise and decline coincided in any way with a need to provide for his family?
On September 28, 2005, Andresmin announced the results of their flagship Winicocha project drilling program. If not disappointing, they were, at the least, \"different\" that what had been expected.
Finally, on December 6, 2005, successor as Chief Geologist, the man who bid for and acquired Winicocha for Andresmin, Mr. Len de Melt unexpectedly resigned as a Director of the Company effective November 29, 2005.
Certainly, all of the foregoing, cannot be considered to be an encouraging sign.
While the company tries to put its best face on matters at its official website, its SEC filings bear out something of a different story.
They indicate that Andresmin may have to develop additional project interests other than their flagship Winicocha property for viable exploration possibilities - something they don\'t have the money for.
Further, that the company is quickly running out of money to cover operating needs and fund on-going exploration efforts.
An inability to raise capital in the near-term could jeopardize Andresmin\'s ability to continue as a going concern.
In sum, Andresmin may go under unless it is fortunate enough to raise \'fresh\' money very soon. Could a Chapter 13 filing be in prospect shortly? If so, investors will get \'waxed\' and even other market participants (e.g., market-makers) will be left \'holding the bag\' like they did in Anton Dist.
Some salient excerpts:
\"…there is no assurance that a commercially viable mineral deposit exists on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for its future exploration is determined. The Company has no known reserves of any type of mineral. To date, the Company has not discovered an economically viable mineral deposit on the properties, and there is no assurance that the Company will discover one.\"
\"The Company is currently in arrears in the amount of $150,137 for unpaid interest expense.\"
\"If the Company is unable to achieve the financing necessary to continue its plan of operations, then it will not be able to continue its exploration of the mineral claims and the Company’s venture will fail.\"
\"The Company anticipates that it will continue to incur significant losses.\"
\"[Andresmin] … anticipates incurring operating losses in the foreseeable future. … very few mineral properties in the exploration stage ultimately develop into producing, profitable mines.\"
\" … the Company does not have any financing arranged and it cannot provide investors with any assurance that it will be able to raise sufficient funding from the sale of its common stock to fund any additional exploration programs. In the absence of such financing, the Company’s business plan will fail.\"
\"In the event the Company is not successful in raising additional financing, it anticipates that it will not be able to proceed with its business plan. In such a case, the Company may decide to discontinue its current business plan and seek other business opportunities in the resource sector.\"
\"In the event no other such opportunities are available and the Company cannot raise additional capital to sustain minimum operations, it may be forced to discontinue business operations. The Company does not have any specific alternative business opportunities in mind and has not planned for any such contingency.\"
\"Due to the Company’s lack of operating history and present inability to generate revenues, its auditors have stated their opinion that there currently exists substantial doubt about its ability to continue as a going concern.\"
Source: 10KSB & 10QSB
In conclusion, wise investors, may consider passing on ADGD stock. All that glitters may not be gold!
