Update on U.S. Gold Corp. (USGL)

I wrote to investor relations of U.S. Gold Corp. yesterday, questioning whether Mr. McEwen is currently properly focussed as the CEO of USGL, noting that "With shares down 55% from recent highs, I wonder whether the focus is all there when I read every other day that Mr. McEwen is leading a crusade for the share value of another company?"

I received a prompt reply in which Ms. Aguirre, the director of IR at USGL, set forth some valid reasons for the recent weakness in the share price of USGL as follows:

"To begin with, a comment in regard to our share price might be useful. As you may have noted, the price of gold dropped over the past few weeks and this affected companies across the sector. In addition, as you may remember earlier this year US Gold closed a financing for $75.15 million. As part of that financing 16 million shares at a price of $4.50 were issued that did not become tradable until about 3 weeks ago. If you look at our price history, you will see a huge increase in volume as well as a dramatic drop in share price coinciding with this. Thus the combination of these shares becoming tradable and the fluctuating gold price has affected our share price over the past few weeks. However, we are happy to say that our share price is not
due to any shift in management’s strategy or operations agenda.

As far as what we are doing to drive our share price higher, I can tell you that our two focuses, exploration and consolidation of the Cortez Trend, are still moving forward. As our exploration efforts produce results and as we move forward with the acquisitions, the share price should be positively affected."

However, Ms. Aguirre also mentioned the following recent activities of Mr. McEwen with respect to USGL:

"In regard to Rob McEwen’s current projects, he is currently at the Denver Gold Forum where he presented on behalf of US Gold to industry leaders. In addition, he is also meeting with US Gold management and US Gold directors while he is in Colorado."

In fact, its the shinenegans at the Denver Gold Forum that inspired my e-mail to IR at USGL in the first place. According to a media report, Mr. McEwen used the forum to advance his personal agenda of "trashing" Goldcorp's deal to acquire Glamis Gold Ltd. As a result, the board of directors of the Denver Gold Group may now consider suspending Mr. McEwen and U.S. Gold Corp. from the Group's activities. Considering the prestige of the Denver Gold Forum and considering that any company trading on the obscure pink sheets needs all the promotional opportunities it can get, for USGL to be suspended from the Forum would be very unfortunate, to say the least.


Related Article: "Gold Forum organizer upset with Goldcorp founder"
http://www.globeinvestor.com/servlet/story/ROC.20060927.2006-09-27T204303Z_01_N27415971_RTRIDST_0_BUSINESS-MINERALS-CONFERENCE-MCEWEN-COL/GIStory/