Web report may be source of mine stock surge
A small Spokane-based mining company says it knows of no reason for a trading surge in its stock, which has pushed up the price more than 48 percent in the past six weeks.
Mines Management, which is developing a silver and copper mine in northwestern Montana, said in a statement Tuesday that, while its usual policy – like that of most companies – was not to comment on market activity, “it is not aware of any material corporate developments which could account for the recent unusual trading activity in the company’s shares.”
The statement came in response to a request by NYSE Amex, where Mines Management shares are listed. On Tuesday, 1.75 million shares of Mines Management changed hands, nearly 10 times the average volume over the past six months. The shares rose 22 cents, or 8.5 percent, to a six-month high of $2.82.
Activity in Mines Management has been elevated since Oct. 28, when 629,370 shares changed hands and the price jumped nearly 30 percent, to $2.47. Since then, daily trading volume has averaged 366,850 shares, triple the average daily volume for the preceding three months.
The stock has been promoted online by a group calling itself the “National Inflation Association,” which among other things recommends people buy precious metals and mining stocks as protection against what it claims is “the upcoming hyperinflationary crisis.” An unsigned report dated Oct. 28 on the NIA website claimed Mines Management had “enormous upside potential.”
Among the people associated with the NIA is Jonathan Lebed, who gained notoriety a decade ago as a high-school student accused by the Securities and Exchange Commission of hyping stocks online. Lebed later settled out of court, forfeiting some but not all of his stock profits.
In its Oct. 28 report on Mines Management, the NIA said it didn’t own any of the company’s stock and wasn’t being compensated for suggesting it.
Its past recommendations include Revett Minerals, a small company based in Spokane Valley, and Coeur d’Alene Mines and Hecla Mining, both significant mining companies headquartered in North Idaho. In each of those cases, the group noted that one of its co-founders had bought shares “and could sell them at any time.”