In last trading session, the stock price of Nevada Exploration, Inc. (OTCMKTS:NVDEF) jumped more than 49% to close the day at $0.450. The strong gains came at a share volume of 980,616 compared to average share volume of 55,482. After the last day’s gains, the market cap of Nevada stands at $10.26 million.
The buzz
As per the last released financial report, for the quarter closed January 31, 2016, Nevada recorded a comprehensive loss of $905,557 compared to $350,455) in the comparable period and as at that date, it recorded deficit of over $17 million compared to more than $17 million at the end of April 30, 2015. The figures mentioned are in Canadian dollars. The working capital deficiency was $441,835 while negative cash flows from businesses amounted to $845,245.
These factors result in material uncertainties that may result in substantial doubt upon Nevada’s ability to continue its operations as a going concern. As seen with junior mining firms, the firm continues to look for capital through different sources including the equity issuance and/or issuance of debt to fund its planned and on-going exploration activities and to meet administrative costs.
The liquidity
In order to keep working as a going concern and fulfill its corporate goals, Nevada will need additional financing through equity or debt issuances or from other available sources. Although the firm has proved successful in obtaining financing in the past, there is no certainty that it will be get adequate financing in the near future or even if it sources, such financing would be advantageous to the firm.
Nevada Exploration have to look for economically recoverable resources and source the necessary funds to continue development and exploration. Also, the firm’s ability to work as a going concern will largely depend on Nevada Exploration’s ability to secure and preserve beneficial interest and title in the assets, entering into deals with other entities to explore and advance the properties.
