The Penny Sleuth Misses The Mark On Caledonia Mining Reverse Split

Interesting post here at MoneyWeek.com about Caledonia Mining Corporation (OTCBB: CALVF, CA:CAL, AIM:CMCL).

The Penny Sleuth author starts the article by explaining that Caledonia Mining Corporation is going to "consolidate its shares" in which he is referring to the 10 to 1 reverse split that Caledonia Mining is planning on undertaking.

Then the author goes on to state "You would think that the type of investor that Caledonia is attempting to attract with this manoeuvre would have the brains to understand the irrelevance of the nominal share price, which tells you nothing about a company’s stock-market valuation."

The purpose of the reverse split is clearly NOT UNDERSTOOD by the genius writing this scathing article about Caledonia Mining. So let me lay it out for him.

By performing the reverse split, the new share price of Caledonia Mining will be over $1.00 per share at current market prices. This opens the doors to a whole new class of investors as Caledonia Mining will no longer be considered a "penny stock".

Penny stocks are known to be highly risky and therefore have many restrictions placed on them for investors wanting to trade them. Penny stocks are highly illiquid when compared to similar companies that are not penny stocks.

There is a huge amount of negative sentiment surrounding penny stocks and this literally steers most investors away from them as they are seen as simply being too risky.

If Caledonia's common shares were trading above a dollar, many more investors may be willing to consider Caledonia Mining Corporation as an investment option.

This article went on to talk about the risks of investing in a company like Caledonia that has its main operating mine in unstable Zimbabwe.

Clifton Mining Company & Desert Hawk Gold Corp - Going For The Gold & Silver

Clifton Mining Company has spent years and years accumulating all of the small mining claims in and around Gold Hill inTooele County Utah in what is now being termed the Kiewit Mining Project.

In fact, according to Rick Havenstrite who is heading up the operations for Desert Hawk Gold Corp., they have invested more than $12 million dollars in this project including the permitting process and refurbishing the mill.

The very exciting part is that this project is just about to start actual production. It has been a long time coming. I am very excited about it as a shareholder of Clifton Mining Company (stock symbol: CFTN). Clifton has survived and progressed this project for years by prudently structuring joint venture agreements with partners that have brought all of the necessary funding and operational capabilities to the party.

Clifton has been able to watch as their properties have continued to grow in value and move toward profitable cash flow without having to spend a dime. Once this project begins production, Clifton will start receiving a steady cash flow from royalties based on the amount of material mined.

If there are no adverse actions taken, this project will gain final approval on March 13th and production will begin in earnest.  Here is a great article for those who want to know more about this project.

Clifton Mining Company Continues Progress

Clifton Mining Company (CFTN) is getting very close to reaping the rewards of a long term commitment to acquiring and developing the Keiwit mining project in Utah among other projects.

What is exciting is that the final mining permit for this HUGE project is at the BLM waiting on comments. You can see the announcement here: http://www.blm.gov/ut/st/en/fo/salt_lake.html.

Kiewit covers the existing Herat Mine, a small operation acquired by Desert Hawk from Dumont Nickel Inc., which had invested at least $7 million developing mining claims there before running out of funding, according to Desert Hawk President Rick Havenstrite. (source).

There are some very attractive things to consider when looking at Clifton Mining. Here are a few.

-Clifton owns a substantial percentage of American Biotec Labs, a highly successful health products company that manufactures a line of nano-silver health produts.

-Clifton has an extremely small share count. Outstanding common shares as of December 31, 2011 were only 56,011,606.

-Clifton has positive cash flow from its investment in American Biotech Labs

-Clifton has partnered with other companies in order to finance its projects. This has led to minimal expense to Clifton while leaving all the risk to other companies such as its previous partner Dumont Mining.

-Clifton is set to receive royalties from production which will make clifton more like a mining royalty company with no operations to worry about. 

-Clifton has other properties that it is developing at this time that add more value.

Clifton Mining is right on the precipice of becoming a cash generating machine. Once this happens, the shares should soar.

Tax Loss Selling Creates Small Cap Stock Buying Opportunites

When it comes to the end of the tax year, sometimes people decide to sell the stocks that went down in price from where they bought them in order to offset other stocks and investments where they had positive capital gains.

The object being of course to limit or eliminate as much of the capital gains tax by offsetting winning trades with losing trades and reducing or cancelling out any taxes due.

This is a sound strategy of course, especially if you don't plan on owning the losing stock in the near future. If you were to simply sell the stock to create the loss and then buy it right back, that would be called a wash sale.

The IRS has a rule called the "wash sale" that disallows the tax deduction of a stock market loss if the stock is repurchased within 30 days. An investor can sell and buy back a stock as quickly as he wants but must be aware of the wash sale rule. The short-term trading of a stock must balance the investment goals with the tax consequences.

One of the consequences of this type of selling is that it can have an amplification effect on a stock that has done poorly throughout the year. These particular stocks already did poorly price wise and then you have these large orders of people coming in to dump an already beat down stock at whatever price they can fetch.

This can create a particullarly attractive entry point for someone that is interested in getting in one of these stocks cheaply.

So take a look around at some of the common stocks you have always wanted to own but never thought the price was right. Your golden opportunity could be staring you in the face in the last couple days of the trading year.

Remember, do you own due dilligence before investing in anything. Make sure you buy a solid company with a good business plan and quality management.

The Queen Finds Out Some Gold Still Remains

Queen Elizabeth regrets not owing all of the gold in the vaults. UK Treasury Seretary says some are still left.

Queen Elizabeth II at the 1 minute mark in this video reportedly says to George Osborne, UK Treasury Secretary, “I saw all the gold bars.  Regrettably not all of them belong to us.” Osborne replied, “Some of them were sold, but we’ve still got some left.”

http://tradewithdave.com/?p=14321

Shoshone Silver Gold (SHSH) - Who Is Selling All Those Shares @ $0.12?

Take a look at someone sitting on the SHSH price.

There are 375,750 shares at the ask offered at $0.12

This stock is as cheap as it gets. Someone can load the boat here cheaply.

Clifton Mining Company Chart Porn (CFTN)

Take a look at these CFTN monthly charts. These are about as pretty as can be.

Would be awesome to see a repeat of the run to around $3.00 per share back in 2004 at a time when Cliftons prospects weren't nearly so promissing. :)