Veris Gold: The end is near…

Yukon Gold is an illiquid $58M market cap gold miner with an expensive borrow (over 10%).  I’ve mentioned Yukon-Nevada Gold / Veris Gold 3 times in the past.  The most relevant post explains why it is a value trap.

On Jan 29, 2014 it issued a press release saying that it defaulted on its gold loan with Deutsche Bank (press release).  The company blames it on a fire that happened on Dec. 19, 2013.  This fire was reported in the Dec 30, 2013 press release entitled “Veris Gold Corp. Reports on Production and Toll Milling for November“.  Apparently the company did not think that the fire was important enough to report right away.  It’s not like defaulting on your debt is a big deal right?

In any case, fire or no fire, I think that Veris Gold would have defaulted anyways.  The mine should never have been restarted and has continually lost money since.

*Disclosure:  I am short common shares of Veris Gold.  In hindsight I should have shorted this earlier (e.g. a year and a half ago).

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