Golden Phoenix Minerals, Inc. (OTC:GPXM) Ends Up the Overwhelming Rally
04 Nov 2010

It looks like since the end of September the management of Golden Phoenix Minerals, Inc. (OTC:GPXM) is devoting actively all its efforts to secure the stable climbing up of the share price. Though, yesterday a correction has been made and the price climbed down from the yearly top.

GPXM share price was corrected downwards by 3.73% and closed the market at $0.14, but the considerable volume of 1.62 million shares traded may suggest that will not remain the only correction for the coming days. Since the company announced that it will cut off the supply of its stock through a Stock Repurchase Program and that it will buy out some of its outstanding warrants, GPXM share price has added 250% and is currently reflecting too optimistic investor expectations.

Golden Phoenix had at the end of June no established sources of revenues, but only minor cash reserves by far not enough to cover the current debts and the running quarter expenses. Though, traders have recently received plenty of exciting news and have let the shares stay overbought for more than a month. Along with the plans to repurchase 20% of its outstanding shares, more support for the rally came also in the beginning of October.

The company filed to have entered into a definitive agreement to acquire all the shares of a company that owns a 100% interest in four principal gold and base metal properties in northeastern Ontario, whereby GPXM will pay with 3.5 of its own shares for every share of the acquisition target. Thus 45.7 million new shares will be issued, so that the final amount of shares outstanding after the repurchase program is completed will end up only about 2.6 million less than it currently is, making the value increase of the share price look overwhelming and highly speculative.

Moreover, at the annual meeting later this month the shareholders will vote on increasing the company’s authorized capital stock, which together with the $127,000 cash position of Golden Phoenix at the end of June leaves the final count of the number of shares outstanding still open.

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