Shares of Vancouver’s Silverado Gold nose-dived in heavy trading yesterday, immediately following the release of an investigative report by WorldNetDaily.
Shares fell 26 percent in the first 45 minutes of trading, and plummeted to a low of .25, down 56 pecent from the previous day’s closing price of .58. The last trade listed at the time of this report was at .39, down 32.76 percent from the day’s opening.
Trading volume was at a staggering 27,783,000 shares, the normal volume being only 1,497,272 shares.
WND’s report revealed numerous “red flags” associated with the company’s activities, including large discrepancies between public statements and SEC filings, non-existent “partnerships” with other businesses and a reliance on paid advertorials rather than third-party press. In addition, WND reported that Republican politicians had written letters of support for the company, letters that were then in turn used by Silverado to promote the stock.
Regarding Silverado’s “new fuel technology,” Sen. Frank H. Murkowski (now Alaska’s first Republican governor in 24 years) wrote in March 2002, “[Silverado's low-rank coal water fuel] could satisfy a considerable portion of the United States energy requirements in an inexpensive, environmentally friendly, and timely manner … [and] could constitute an important new source of alternative energy for the United States and the world.” At the time the letter was written, Murkowski was chairman of the U.S. Senate Energy and Natural Resources Committee. Silverado claims it also received similar support from Sen. Don Young, R-Alaska, and Rep. Ted Stevens, R-Alaska.
Although an independent stock analyst termed the letters of support “form letters,” the public officials generating them could not be reached for comment.
Prior to publication of the report, Silverado CEO Garry Anselmo called WND and said, regarding some disturbing information the newssite had uncovered, “I asked you not to get into this,” telling WND to “be careful … this is a big political machine.” Anselmo added that individuals who used to work with Murkowski now work with Vice President Dick Cheney.
Following publication of the report, WorldNetDaily immediately received praise from analysts at Smith Barney, Iris Financial Services and First Associates Investments, among others, as well as from gold and mining analysts. Former SEC prosecutor Gary Goodenow, quoted in the story, called it “awesome, just awesome – very, very well done.”
On the other hand, a gold-touting website, 321 Gold of Miami, which had previously touted Silverado on its site, released a commentary calling WND’s piece “a hatchet job.” However, Bob Moriarty, writer of the 321 Gold piece, conceded: “Obviously, the article raises some real issues of overstating resources and assets. If they are true, Garry [Anselmo, Silverdo's CEO] should come clean and put this behind him. …” Moriarty disclosed to readers that 321 Gold had received advertising fees on a regular basis from Silverado and that, “above all, the reader must realize that each investor is responsible for his own due diligence. It’s your money and no one can take responsibility for you.”
Silverado, meanwhile, released its own statement yesterday afternoon regarding what it called “today’s dramatic fall in its share price.” Signed by CEO Anselmo, it read: “The company knows of no reason to cause today’s dramatic fall in its share price. There is no material fact or information relating to the company which has not been fully disclosed. In particular, the company knows of no adverse fact or information relating to, or which would affect the company or its share price. The company is well financed, and the development of its Nolan gold property continues as planned to achieve production in late spring or early summer of this year.”
Read the WND investigative report: “Canada’s Silverado: hottest gold stock?”