Guyana Goldfields, Inc. (TSE:GUY) Gains on the Plunging US Stock Market

[[tagnumber 0]] [[tagnumber 1]] [[tagnumber 2]]Shares of Guyana Goldfields, Inc. (TSE:GUY) gained for a second session in row yesterday as the general stock market plunged even further. Gold is getting interesting again as stocks look bearish and GUY has declared that it has a project that is supposed to start production in the middle of this year.[[tagnumber 1]] [[tagnumber 4]][[tagnumber 5]][[tagnumber 1]] [[tagnumber 2]]GUY closed at $3.97 for a share on Monday which represents a small gain from the previous session. Daily volatility was higher though and the stock price broke up to the upper Bollinger band which could signal a major break out of the trading range this week. Trading volume was huge as well yesterday, thus technically GUY could have more short–term upside potential.[[tagnumber 1]] [[tagnumber 2]] [[tagnumber 1]] [[tagnumber 2]]Longer–term, however, the company looks overvalued at the moment. It still has no revenue, its cash position got even weaker in this year‘s first quarter which led to a widening gap in the working capital. GUY already has a large long–term debt outstanding and currently finances its operations again with new borrowings.[[tagnumber 12]][[tagnumber 1]] [[tagnumber 2]]According to GUY financial reports, its Aurora project is supposed to start production in the middle of this year with the expectation to produce between 30,000 and 50,000 ounces of gold by the end of the year. Total costs are estimated at $277 million, $117 of which financed from equity contributions and $160,000 coming from a Project Loan Facility signed in 2014.[[tagnumber 1]] [[tagnumber 2]]Thus GUY is dependent on advances received under the Facility while principal repayments should commence already in December this year. If, however, no actual commercial production of gold begins as planned, GUY will have to seek for other sources of cash to repay the accumulated debt.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]