Hunt Gold Corporation (HGLC)

[downsideup]

Doesn't take a rocket scientist to do the DD math on this one and decide it should be bashed:

From pinksheets.com:

Estimated Market Cap
1,616,028,644 as of Jul 18, 2008

Outstanding Shares
293,823,389,782 as of Jun 20, 2008

Authorized Shares
300,000,000,000 as of Jun 13, 2008

Number of Share Holders of Record
984 as of Jun 13, 2008

Float
480,409,066 as of Jun 13, 2008

First, is the company really worth the $1.6 BILLION dollars in market cap it has at $0.005 a share ? They would have to be EARNING over $50,000,000 a year with a PE over 30 to justify that sort of valuation. Note, at $1000 per ounce gold, that value would require them to have 1.6 million ounces of gold already mined and already refined and already in hand. Assuming they do get really lucky and eventually find that much gold, it will cost $300 per ounce to produce it... a cost of $500 million that doesn't even include mine development costs or the years of overhead... leaving $1.1 billion in hypothetical value... worth at most $0.0037 a share. Add to that the obvious truth that this is NOT a mining company, but a an exploration stage property owner, AND that there is not anywhere near that much gold they can claim to have in the ground... and the $0.0037 a share is overpriced by many times.

A more realistic but still wildly optimistic "WAG" might give them 1/3 that quantity in resources... but it is still ludicrous to value it as if it is finished product rather than discounting it as a still unproven, still unmined potential future asset value that still needs to be proved up (years of effort) and developed (more years of effort)... a discount factor of 10, at least... making a share worth no more than $0.0004 right now.

It doesn't really matter what the "float" is... when there are almost 300 BILLION shares outstanding. The value of the undeveloped mining property holdings here is clearly not close to the current market cap of 1.6 BILLION dollars ? Cash per share, assuming they do have $50 million in the bank, is $0.00017 per share... which is likely pretty close to the upper limit in a premium that can be applied to what a share is otherwise really worth right now. Call that a max fully valued price per share of around $0.0006, at least until they've proved up or realized some larger value in their other properties, and until they've reduced the authorized with an at least 1000 to 1 reverse split. Any share buy back done before that reduction in shares authorized and outstanding... is both meaningless and pointless... except for the purpose of artificially pumping up the share price.

I would not touch these shares with a ten BILLION foot pole above $0.0004 until they reduce those numbers. Otherwise, the buy back is deliberately pouring NEEDED company cash down a rat hole... and there is no reason to do that unless SOMEONE plans to sell shares into the artificial strength and cash out for WAY more than a share is worth. There is no reason to do this OTHER than a pump and dump.

Given there are still 6.177 BILLION shares authorized and not yet sold... I can see where one motivation for trying to boost the share price lies... if they can sell those new shares for $0.01 each... they would raise over 60 million dollars from sales of new shares... and any day you can sell a share with a value of $0.0004 for $0.01, some 25 times more than it is worth, that is a pretty good day of operations in the capital markets.

IF this shameless effort at pumping worthless paper works... it will provide the most compelling case you could hope to find for making naked short sales of penny stocks fully legal.

Do not support this scam... instead of putting your money to work in an opportunity that is undervalued... and that allows for appreciation of the value of your investment over time.

AFTER they have the shares authorized down below 300 million, it will be worth looking at again. Until then, you are onlly lining up to be fleeced in the reverse...