Gold & Silver Mining (OTCMKTS:CJTF) Stirred Up Again

The news surrounding Gold & Silver Mining (OTCMKTS:CJTF) has been rather good. The management team recently crunched some numbers and they concluded that if everything goes according to plan and if the price is right, the company could one day produce as much as $500 million worth of gold per year.

Another announcement from yesterday suggests that this day might be coming closer and closer. CJTF proudly announced that they have received an official permit to carry out some exploratory mining operations at 65,760 square feet of the Goldfield Basin project in Nevada. They said that they expect some decent results from the sampling they’re about to conduct and they announced that they’re ready to consider potential joint venture, merger, or any other proposals that might come their way.

All in all, judging by the press releases, CJTF is moving forward with its business plan. The stock, however, is a different matter. There are volume spikes thanks to the relentless torrent of optimistic press releases, but they rarely result in significant jumps. In fact, between September 9 and September 29, CJTF lost a whopping 91% of its value and it found itself at $0.0005 per share. It has managed to recover some of the lost ground since then and yesterday, it also logged a dollar volume of around $112 thousand which is not bad, but it’s still sitting at $0.0008 per share and that sort of price, you have to agree, isn’t really in line with the series of forward-looking announcements. Let’s see if we can find the reason for this.

The truth is, while the press releases sound optimistic enough, the financial statements paint a completely different picture. They have been quite dismal for a while and the latest one doesn’t deviate from the trend:

• cash: $2,139
• current assets: $192,639
• current liabilities: $1,331,041
• NO revenue
• six months net loss: $172,585

It’s not easy to trust a company that promises to bring in millions of dollars in shareholder value and then fails consistently at delivering on those promises. It’s just as difficult to trust a company that has absolutely drowned its stock in dilution. The following facts and figures should give you an idea of how bad things really are.

Between March 31 and June 30 the number of issued and outstanding shares grew from around 430 million all the way to just under 765 million. On July 22, the management team finally figured out that with a share structure as crippled as this one, CJTF is never really going to attract any serious investors and in order to solve this problem, they effected a massive 1 for 1,300 reverse split.

The people at the company’s helm briefly made the share structure a bit more attractive, but they failed to put a stop on the share printing. CJTF‘s profile at the OTC Markets now says that on July 30, just eight days after the reverse split, the O/S count stood at more than 1.3 billion.

Thanks to the somewhat liberal alternative reporting standards, we don’t know why the colossal number of shares got printed. Historically, most of the dilution has been caused by convertible debt and we won’t be too shocked if the culprit is the same this time.