Martin Tsvetkov

Zoro Mining Corp. (OTC:ZORM) Remains Highly Volatile Following Private Placement Deal

by Martin Tsvetkov February 9, 2012
ZORM_chart.pngLast Tuesday, Zoro Mining Corp. (OTC:ZORM) surged by 37.5%, to the delight of all its supporters, only to crash down on the very following session.

Indeed, investors barely had the time to enjoy ZORM's glorious chart run on Feb. 7 as it ended up being so short-lived that the company's stock eventually collapsed during the latest trading session which took place yesterday. Closing at $0.17 per share, ZORM went down 22%. More than 258 thousand shares changed hands, which is more than three times higher than the average daily trading volume of the company.

Thus, those traders who expected ZORM to hit its early-December values again were left disappointed.

Zoro Mining Corp. presents itself as an independent exploration-stage company focused on studying gold projects in both North and South America. On Jan. 18, the company announced it had raised in excess of $1 million in a private placement deal selling more than 7.8 million units at a price of $0.15 per unit. Besides one common share, each unit was reported to include a half common share purchase warrant, as well. The latter gives unit owners the right to purchase additional common stock at $0.25 per share within the period ended Dec. 13, 2013.

ZORM recently filed a full-blown 10-Q form to disclose its financial performance in the three-month period ended Oct. 31, 2011. The document revealed:

  • cash reserves of approx. $5 thousand;
  • working capital deficit of $1.94 million;
  • net quarterly loss of $800K and a cumulative loss of $21.9 million incurred since inception.

ZORM_logo.JPGWhile raising $1 million in a private placement deal could definitely be considered as an important investment tool which could be used to develop ZORM's gold projects, this amount barely fills half of the company's working capital gap. What is more, the company's losses are mounting and show no signs of slowing down. Of course, the situation could change in an instant provided that at least one of the company's properties turns out to be a goldmine.

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