Avoiding African Gold (AGG.TO) and Columbia River (CRVV)
In the current market I've bought into many a promising Ghanaian miner or explorer that has no major mark against it; I think that Ghana abounds in yet-undiscovered gold (and that the gold price will rise). Some will fail but others will be real bonanzas.
Worldwide, I mostly try to avoid notorious polluters, killers of artisanal miners, destroyers of villages etc., those that have over-hyped the stock and run the price up, those with focus in unhappy places like Central African Republic, Congo, Halmahera or Liberia, and those associated with unsavory promoters. Or I just "don't like the look" of either the company or its stock price pattern.
Another reason to steer clear is a dubiously layered structure of ownership, with multiple opportunities for dilution. I have no especially well-informed opinion about the Mankranho property in central Ghana which is said to be the only asset of Columbia River (CRVV) and the main asset of African Gold (AGG.V) which controls CRVV; however, I don't like the recent CRVV announcement authorizing doubling of the shares of Columbia River and options for its insiders. The general tone seemed to me to be "oh gee, markets are heating up so we'd better put something out there" rather than a serious treatment of the property. If CRVV waters its stock, it could reduce AGG's effective interest in Mankranho from over 68% to half that. Since AGG now controls CRVV, that would be done only with AGG's complicity. And, it's hard to imagine how anyone could deserve to be granted (diluting) CRVV options in addition to his or her (diluting) AGG options.
One layer of dilution is a necessity but who needs these multiple layers?
AGG may have a meteoric trajectory, but this is one I'll only watch from afar. (Disclosure: I don't short gold stocks at present.)
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