Some Hot IPO

White Tiger Mining Corp, a Russian-owned gold company that used to be SL Resources Inc., doesn't have a Website and there's little information to be found on it. It boasts two flagship properties in the Russian Federation, out of five in total. One, the Ildikan property, has a small mine producing since 2008 with proved and probable reserves of 110,000 oz. It's slated to produce about 22,500 oz. this year. The other, the Nasedkino property, has a deposit with an indicated resource of 133,000 oz. It and other locations on the same property have inferred resources of 151,000 oz.

So, this company is a producer but a small one. It has exploration prospects, but they're not very big as of yet. It's well below 1 million oz.

It listed on the Toronto Stock exchange December 31st; it's only been trading for less than a week. Just prior to its listing, 24,830,210 shares were sold to institutional investors at a dollar each. That private placement bumped up White Tiger's total shares outstanding to 114,630,210.

It opened at $1.20 - not bad for a company that was a dollar just before its listing. The same day, it closed at $1.75.

If that wasn't hot enough, it closed the next trading day at $3.23. The third day, $4.20.

As I write this post, the current price of White Tiger is $7.02. It got as high as $8.45 today.

Now, that is one hot IPO - especially for a company that's a little lax on self-promotion. Much smaller new listings have a Website already up and running by the time the stock starts trading.

Trading became so frenetic, the company has issued a press release saying it doesn't know why the stock was up:

White Tiger Gold Ltd. ("White Tiger Gold" or the "Company") (TSX:WTG) notes that, at the request of market surveillance on behalf of the Toronto Stock Exchange, White Tiger Gold is issuing this news release to confirm that there are no corporate developments and the Company is not aware of any material undisclosed development that would cause recent movements in the Company's share price.

From my experience, when a company issues such a release things tend to cool down. In this case, the release was disseminated at 12:50 PM ET but the high came right at noon. So, instead of cooling things down, the release came on the heels of an already-cooled-down market. The stock was at $7.50 shortly before the release went out; shortly afterwards, it got sold down to $6.75.

The market for gold explorers is frothy, no doubt about it, even if the froth hasn't spread to all of them. This one's unusual, in large part because some digging is needed to find out what it's up to. At its height, White Tiger's market cap was more than $900 million. Its indicated market cap pre-listing was only $110 million.

Yes, this is an odd one in the froth department. For a seclusive company, White Tiger has certainly been one hot IPO.

Its one-year chart, from Stockwatch:



The moral of the story: there's nothing wrong with shying away from a company because something's off. White Tiger's had an exciting ride, but private placementeers aren't prone to drastically undervalue a company; a small discount usually suffices. Hence, it's reasonable to conclude that this one's been pushed up above and beyond.

Disclosure: I don't own a single share.