Mens Electric Shaver Consumer Reports
St. Elias Mines (SLI, TSXV) ( SELSF.PK ) is a gold exploration company that has yet to report any revenues or show significant gold deposits. I attended a St. Elias Mines presentation a few years ago when they were raising money at C$1.50 per share, after previously doing a financing round at C$0.75. They raised more money this summer at C$1.80. Management is still hyping the farflung potential of its Peruvian Tesoro property with no results three years later.
Management brags about attractive gold samples from veins near the surface (strangely none was shipped in FY 2011 which could open up a whole can of worms). Management still hypes the ovoid, a potential huge gold deposit below these veins. Until this month, very little money was spent on drilling. But stock marketing expenses went through the roof. For the fiscal year ended May 2011, promotional, travel and telephone expenses increased three-fold to $1.5M.
The short-selling catalyst is that the company recently began drilling at Tesoro. Even after all these years and advanced surveys, the company does not have the confidence to undertake deep drilling where the ovoid deposit supposedly exists. Instead, the company is initially doing shallow drilling amongst already established veins;and may try to use this insignificant data to prolong the ovoid myth a bit longer. But this stalling tactic is running out of time. By definition, a drilling program is used to find major gold deposits, not veins. Investors and the marketplace expect to see substantial deep drilling results. If the company avoids or comes up empty on deep drilling at Tesoro, then the stock will crash towards zero. This distinctly possible negative event is quickly approaching.
