Were you referring to Garpa Resources? There are a lot of mining concerns in Colorado and it's a small area - a small world. The history of the relationship between the stock market, miners, and shareholders is over a hundred years old. More shareholders have lost money on mining stock than ever made money. Sad, but true.
Who is to blame?
Well, the corporate officers have to shoulder quite a bit. They tripped over many hurdles when they could have just walked around them, but they aren't the only ones to blame.
It's the nature of penny stocks to see the L2 be manipulated by algorithms to paint an inaccurate picture. Also, convertible debt attached to a company should pop up a huge red flag when it comes to shareholder equity.
Using the NI-43-101 for a mine inside the states is a red flag for sure, but it's a minor red flag from a trading or short term investing standpoint. Looking through the Q's for any reference to CD is a much better indicator.
Any company that decides convertible debt is a good way to gain working capital is on a hail mary mission. Imagine going to the bank to get a 1 year term loan to buy a boat and using your pickup for collateral. The day after the loan closes the bank comes over and starts pulling parts of your pickup to sell at auction. Now you have a boat, but no way to pull it to the lake. CD is toxic financing.
Is it fraud? Nope. Trying to prove fraud against a company that publicly reports is like suing a state for losing money on the lottery. Best way to win is not to play.
Some traders made money over the years on CGFI. They didn't know anything about NI reports or CD or the emotions involved on either side; they just looked at volatility and spread. Should we blame them, too? I wasn't one of them. I did really in-depth research and every bit of it - every single bit - hinged on the price of gold. The company bet of the price going to $5k/oz, and so did I. Well, it didn't happen, so I've got 20 shares at a cost per basis of about $2450. Who to blame? I blame myself. I win some and I lose some. I've never won by thinking negative.
