Aldershot Resources Hits Rock Bottom - Establishes New 52 Week Low

Exploration junior Aldershot Resources Ltd., of Vancouver, BC, hit a new 52 week low yesterday on the TSX Venture exchange. Aldershot, as you will recall, has active uranium claims in West Quebec.

Its stock price closed at 8 cents a share. It has been as high as 43 cents a share in the last year. This represents a loss of shareholder value of about 81%.

By contrast, the spot price of uranium is down to $71 from its peak of $138, or about 49% from its 52 week high.

According to Stockhouse.ca, Aldershot now has a market capitalization of $5.19 million, down from a 52 week peak of nearly $28 million. That represents a loss to shareholders of nearly $23 million over the last year. (Within the last two years or so Aldershot's capitalization has been closer to $40 million.)

This performance has occurred in spite of the much trumpeted announcement a few weeks ago, when Aldershot stock was at its previous 52 week low of 8.5 cents, that an investment company had just finished accumulating over 10% of the outstanding shares of Aldershot. That gave Aldershot shares a temporary boost to 14 cents a share (a short-term rise of almost 65%) which has subsequently evaporated. Over the same time frame, judging by stock trading volumes, about the same number of shares that were bought during the recent accumulation were subsequently sold. So now the share price sits at 8 cents.

It is important to note that even though hundreds of thousands of shares were purchased by the investment company they were worth just tens of thousands of dollars (this is a penny stock after all). Even so, not a nickel of that money would have gone into Aldershot's coffers since the investment company was buying shares on the open market, not directly from the company.

Just in case you're thinking Aldershot might be a good buy right now, Stockhouse.ca recommends investors must only consider buying companies that have two technical measures pointing well into positive (or "bullish") territory. The "signal stockscore" must be at least 80/100. Aldershot's was at 2/100 yesterday. The "sentiment stockscore" must be at least 60/100 and yesterday Aldershot's was at 37/100. Both scores for Aldershot are "bearish" according to Stockhouse.ca, meaning there is a significant chance of further declines in stock price.

If you're hoping to cash in on an investment company's accumulation be wary. It can be notoriously difficult to time momentum stock accumulations as a retail investor because the momentum can be very difficult to spot. If it reaches a significant threshold, the announcement will only be made after the fact leaving little to no time to buy cheap shares.

What does this all mean for us in West Quebec?

The vast majority of the over $5 million dollars in investment capital Aldershot raised in 2007 has vanished, with no signs of an economically viable mineral resource on the horizon in West Quebec (or anywhere else for that matter, at least not according to legally required National Instrument 43-101 reporting standards).

Aldershot, which owns over 350 claims in West Quebec alone, has been unsurprisingly silent about its plans to explore these properties in 2008.

With likely much less than $400K in its bank account (based on financial statements published last winter), and no reported revenue to date, Aldershot has all the outward appearances of being in deep financial trouble. Unless it succeeds in raising new capital soon, it will likely be unable to meet its obligations to service its exploration projects not only in Quebec, but elsewhere in the world, forcing some tough decisions.

For a greater sense of the financial challenges Aldershot faces consider this: at the required $600 per year per claim, Aldershot is expected to spend over $200K on exploration in West Quebec alone in 2008. This figure does not include any additional amounts that may have been agreed to if any of the claims were obtained from third parties (and some were). Add to that financial burden property expenditures elsewhere in Quebec, British Columbia, Australia, Zambia and Chile, and its less than $400K is likely melting down to nothing at an alarming rate.

As possible foreshadowing of things to come, virtually all of the recent press around Aldershot's exploration work has been focused on its Australian properties, and in one recent transaction it sold a block of claims over there to another company.

Don't be surprised if Aldershot announces it is shedding its holdings elsewhere to preserve precious cash, including here in West Quebec. It has already indicated joint ventures would be the only way it could proceed in West Quebec but given there is no NI 43-101 compliant statement of uranium resources, few would likely take the chance.

Aldershot's fiscal year ended January 31, 2008, and according to TSX reporting requirements has 120 days to file its audited financial statements on Sedar.com. That will be a very interesting read given there has been no public announcement of new financing for quite some time.

Perhaps a tentative sigh of relief can be heard from the growing number of West Quebecers who object to having a uranium mine in the neighbourhood. In this case, the best neighbour may be an absent one.

For more information on the Stockhouse.ca measures noted above see: http://www.stockhouse.com/tools/?page=%2FFinancialTools%2Fsn%5Foverview%5Fhelp%2Easp%3Fsymbol%3DV%2EALZ