Yukon Nevada Gold (YNG)

Shares outstanding 800M (adding buffer for dilutive share issuance arrangements)

Cash $0.01
Current Assets $0.05 (a large portion of their cash is in long term assets as restricted cash)
Book Value $0.12

Debt $0.02 (min rate of 5%, and saw a note about repayments being linked to the spot price for gold. The higher the gold price the higher their repayment on the loan. WTF? I guess the theory is that if the gold price rises they will be better able to pay, while if the gold price falls, they will be protected by decreasing loan payments.)
0.6 Current Assets / Current Liabilities

EPS -$0.16

So looking at the stock based on the financials above, it looks terrible. However, based on the notes, there is a lot going on behind the scenes (which is even more terrible). The company recently had their environmental permit pulled on their main mine, and discovered a number of reporting discrepancies including the inability to account for nearly $3M in gold (2,700 oz), and the resulting dismissal of the operator of the mine (Gold Eagle).

Considering it will take $10M in profits to move the stock $0.01, it will take about $600M in profits (over 10 years, that works out to approx $60M profits per year) to justify the current stock price. $60M per year = $1200 gold price - $800 cost per (high estimate) = 150,000 ounces per year. Hey, what do you know, that is their exact target.

So basically the best scenario is already priced in and there is still significant risk it could be worse. What are we waiting for?

To be continued....

Well, still can't justify why I bought it, but made 10% in about 1 week anyway. Sold at $0.71.

The actual $ amount gains are not so impressive as the %, but are adding up (all gains reported include cost of commissions).