Gediminas Jasionis
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Golden Dawn Minerals Inc. (CVE:GOM) (PINK:GDMRF) Stock Shoots Up But Doesn't Hold Any Promises

by Gediminas Jasionis May 23, 2011
gom_chart.pngGolden Dawn Minerals Inc. (CVE:GOM) (PINK:GDMRF) stock price shot up by the end of the last week but the lack of recent catalyst make this a risky trading opportunity.

GOM added 28.6% on Friday under a heavy trading volume of 5.9 million, which was way above the average of 756 thousand. Technically, the price broke out passing above the resistance at 11 cents.

The price action complements the previous breakout attempts - the GOM's been testing the resistance since the beginning of 2011. The breakout on Friday happened on the heaviest single day trading volume over the past year.

gom_logo.jpgNo recent news has influenced this move thus the rally actually lacks catalysts. The announcement from the last week though might have provided some positive sentiment for this and the rest possibly came from short squeezes, which is very common for Friday afternoons.

On May 13 the company announced to have closed a private placement of 4 million units priced at 10 cents each. The warrants included in these units can be converted at 15 cents per share over the coming two years.

Proceeds of $400 thousand will be used as a working capital and for the development of a drilling program on the Greenwood properties. The company also said they will be offering another 3.5 million units for $350 thousand in the near future.

The combined dilutive potential of both these offerings is roughly 1.6%.

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