Orofino Gold Corp (OTCMKTS:ORFG) Completes Acquisition, Ticker Slashes a Quarter

2014 is proving to be quite a year for Orofino Gold Corp (OTCMKTS:ORFG)’s shareholders. The whole thing started back in January when the management team announced that they want to acquire a private oil and gas company in an attempt to bring much more value to the balance sheet. Little by little, they gave out some more information about the future subsidiary and yesterday, about an hour after the opening bell, they announced that the deal has been closed.

As you probably know, the new daughter company is called Nations Oil & Gas LLC and if the press releases are to be believed, they have some interests in oil and gas wells that should be quite lucrative. They’re still not able to tell us the exact figures that should now be a part of ORFG‘s balance sheet, but they did promise to disclose them as soon as possible. The company name should also be changed within a couple of weeks.

By all means, this is good news. ORFG clearly failed to make it on their own and shareholders are now hoping that the new subsidiary will help them finally gain some recognition. And yet, for some reason, the ticker dropped after the news hit the wire.

In fact, nearly 10.5 million shares changed hands during yesterday’s session meaning that the dollar volume stands at around $664 thousand. The price took a heavy blow as well. More than a quarter of the value was lost and ORFG closed the day at $0.048 per share. This, by the way, was the fourth consecutive red session. The cumulative losses since February 27 amount to 41%.

We opened the message boards to see what investors think about the performance and we can see that there’s no shortage of people who are understandably disappointed with the drop. There are, however, traders who are convinced that the slide will stop and that ORFG is now about to make another, more consistent surge. They reckon that the Nations Oil & Gas acquisition was just what the company needed and they seem adamant that the future financial statements will prove them right.

Will that happen? Only time will tell, but we can see that the market still isn’t entirely convinced. About and hour after today’s opening bell, ORFG is hovering just above the $0.04 per share mark which is another 15% below yesterday’s close.

Everything suggests that investors are somewhat skeptical towards yesterday’s merger. Having done some research, we can also see that there are some eyebrow-raising facts.

As we mentioned, ORFG say that the new subsidiary will bring in quite a lot of assets to the company’s dismal financial statement. They have been trying to convince us about that since the very first announcement. In yesterday’s PR, however, they mentioned that Nations Oil & Gas is a “newly formed Nevada based company” – something they didn’t say previously.

Sure enough, when you check out the official information on Nevada’s Secretary of State’s website, you’ll see that it was actually established four months ago.

Is this enough time for a small company such as Nations to acquire all the properties and start pumping oil out of them? It might be. Only the future financial statements can give us a clear answer. Until then, doing a lot of due diligence and carefully considering all the risks is absolutely essential.

mCig, Inc. (OTCMKTS:MCIG) too had an interesting session yesterday. Unlike ORFG, it managed to jump up by around 24% while registering a dollar volume of more than $5 million. Plandai Biotechnology Inc. (OTCMKTS:PLPL), on the other hand, gained nearly 12% after some promotional outfits decided to send the next batch of paid alerts through the email.