If you are thinking of buying shares of Rise Gold think again.
As you probably know Nevada County is considering issuing permits to a Canadian Company called Rise Gold to reopen mining in Grass Valley. The reason for this letter is because of my decades of knowledge and experience in the finance industry and my desire to protect you and my neighbors from what would most certainly result in financial loss.
Perhaps you have considered buying shares in Rise Gold thinking this could be your get-rich-quick opportunity. Regardless of if you are for or against the mine, please don’t. Please consider the following facts:
I am now retired. I was formerly in the finance industry holding positions ranging from a financial advisor to branch manager for Wachovia Securities of their Grass Valley and Auburn branches to CEO of a registered broker/dealer. By the time I retired I had most of the securities licenses available which required hours of testing and involved detailed knowledge of both the Financial Industry Regulatory Authority and Securities and Exchanges Commission rules and regulations.
You should be aware that financial advisors are prohibited from soliciting or marketing shares of companies like Rise Gold that trade for less than $5 per share, generally called penny stocks, because of their very high risk. If they do they would most likely be kicked out of the industry. The failure rate of penny stock companies is almost 100% — and they are generally very poorly financed.
Like Rise, they often have no business income and rely on borrowing and selling additional shares to stay afloat. If you were to examine Rise’s SEC filings, as I have, you would see that they have huge quarterly losses totaling millions and inadequate cash to continue operation. To address this Rise has recently issued an additional $3.3 million shares.
They will no doubt have to do it again, and each time the ownership of existing shareholders is diluted. Reopening the mine would require millions of dollars to clean up the Centennial leftovers before they could even start.
Penny stock companies are not regulated in the same way as other companies nor are the individuals who solicit the sale of their stock, who are not even licensed. This opens the door to fraud and misrepresentation.
I called Rise telling them I might have an interest in buying their stock. I was called the next morning by a lady from Ontario. She recounted the success of previous mining operations here and told me that even more gold remains in the ground, which is probably true. But then she told me that they are “in the final stages” of getting the approvals necessary to reopen the mine — not even close to true, as there hasn’t even been an Environmental Impact Report done yet — and that approval is a “rubber stamp away 90% probability it will be done by December.”
Unfortunately, information about penny stock companies is typically hard to find. No stock analysts follow the stock and provide recommendations or reports. Why would they waste their time? Most likely with a stock purchase, everyone will lose it all. I hope you didn’t invest in Emgold the last time around.
My wife and I have lived on East Bennett Road just around the corner from the big silo at Brunswick and Bennett Roads for 20 years. We picked it because of the beauty and tranquility of our wooded lot. If the mine were to reopen our neighbors and I would see each of our homes drop in value by as much as $100,000 or more, our wells would run dry, the 24/7 operation would obliterate the night sky and the serenity would be replaced by the sounds of rock crushers, graders, top loaders, and hundreds of trips by diesel trucks carrying tons of rocks.
Because you may not live next door don’t think the reopening won’t affect you. It will, but I’ll save that for another time.
Bob Clark lives in Grass Valley.