Gold American shares are quoted on the O.T.C. Bulletin Board, which is home to legitimate businesses, but is vulnerable to abuse because of low regulatory scrutiny, according to the British Columbia Securities Commission. Issuer requirements are not onerous, it said.
Martin Eady, a director of corporate finance at the British Columbia Securities Commission likened the O.T.C Bulletin Board to the old Vancouver Stock Exchange (VSE). “You are more prone to finding the Bulletin Board as more of a wild west that the old VSE was renowned for,’’ he said.
Given that Gold America’s stock price has tumbled to 74 cents on Tuesday from a 52-week high of $1.45, investors aren’t nearly so optimistic.
At current levels, the Reno-Nevada-based company has a market cap of $223.3 million, based on 290 million shares outstanding.
By comparison, Yale Resources Ltd. (TSX: V.YLL, Stock Forum) the Vancouver junior that is running exploration at Guadulupe after granting Gold American an option to earn a 90% stake in the project, was trading at 7 cents (Canadian) on Tuesday. Yale currently has a market cap of $5.3 million.
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