The stock of Medinah Minerals, Inc. (OTCMKTS:MDMN) has been rushing up the charts and in just six sessions managed to double its price from $0.04 to $0.08 at the end of Wednesday’s trading. Yesterday the momentum behind the stock picked up even more speed lifting the ticker another 25% higher to a close of $0.1033.
The last time MDMN
found itself above 10 cents per share was in October 2012, nearly a year and a half ago. The sheer number of traded shares posted yesterday was another record for the company – investors were able to exchange more than 30 million of MDMN
The chart performance of the stock has indeed been impressive but the price gains have not been supported by anything material. The company is as reluctant in issuing press releases as ever and the last one was published on April 25. In a rather vague way it announced that MDMN
have received an offer from a group of Peruvian mining experts for the development of the Altos de Lipangue properties. Now the management team will have to make a decision whether to accept the deal of not prior to June 9, this year.
With no actual details about this agreement contained in the PR investors are hoping that the annual shareholder meeting scheduled for this Sunday will shed some light on the current plans of the company. If the meeting manages to fulfill all the expectations the share price might continue to grow but if investors are not satisfied the stock could crumble down equally as fast. In the past MDMN
has made quite a few similar runs that proved to be quite short-lived.
At least the financials of the company seem to be a lot more stable than the majority of other mining pennystocks. According to the annual report MDMN
finished 2013 with:
- $337 thousand cash
- $956 thousand total current assets
- $411 thousand total liabilities
- $1 million revenue
- $343 thousand net income from operations
Investors should note though that 5 months ago the company was sitting at close to 1 billion outstanding shares out of the 3 billion authorized. Furthermore, in order to consolidate its mineral properties MDMN
issued 35 million convertible preferred C shares to the family of its President Mr. Juan José Quijano Fernández. Each of these shares can be turned into 10 common shares for a total of 350 million.
For now MDMN
is still an extremely risky choice. The stock has already made a significant climb and chasing after it may not be the best decision. Currently the company has a market cap of $100 million which may prove to be too much for their fundamentals to support.