>> Troymet Backgrounder <<

Anyone who has followed my blog knows that my number one rule is always, follow the volume. Not the news, but volume.

Many times a terrific news release does nothing for a stock, barely even budges the volume, thus it's just another story untold. When the volume comes, then the story and the stock is "in play".

And often we'll see a stock moving with terrific volume on seemingly nothing at all. That's why I am writing this piece this morning as it applies specifically to yesterday's activity with Troymet Exploration Corporation.

Yesterday morning at 10:36am I mentioned Troymet on my blog. It was at .045 on 2.2 million shares traded. That's huge volume for a stock that barely averages 100,000 shares traded in a single day. So clearly Troymet was "in play".

Long story short,it went on to touch .105 and then closed at .085 but not until 14.5million shares had traded. That's more than 25% of their entire shares outstanding (approximately 50 million).

The stock was not halted, but after the bell Troymet did release a statement that said ... "it is unaware of any material changes that would cause the current level of trading activity".They were of course compelled to say something and that's the standard statement that any company releases after a day that produces a run on the company's share price and especially when the volume is so high.

The message boards were alive with chatter, all the while some very large orders were going by. Orders that looked a little too large to be the average day trader. 

Troymet's stock price started to pull back around 3:30pm and that's exactly what we expect from the day traders,but then it came back, with some big buying blocks before the bell.

Day traders don't typically buy that way. Buying after a good run and into the closing bell, on no news of any kind, and buying large share lots.That seemed odd to me, in fact the the entire day's trading activity seemed odd.

We are in the dog days of summer with far less trading and here we trade 14.5 million shares. So here's where I'm at now.

Troymet had a news release back in June 2009 that said, and I quote

"The 2008 exploration program indicated the presence of a large intrusion-related gold system spanning the approximately 12-kilometre strike length of the northern half of the Golden Eagle property"

"Gold mineralization in the Skarn zone occurs as visible gold and associated with pyrite in narrow (5- 25 mm) quartz-calcite stringer veins. Visible gold also occurs with quartz-carbonate-sulphide veinlets (1-10 mm) in host rocks near a feldspar-amphibole porphyry dyke at the north end of the Skarn zone. Five grab samples reported by Lodestar from a trench in this area range from 8.9 to 200.5 g/t gold."

"The Company is actively seeking partnersto advance its highly prospective properties and continues to seek new projects with high-value and large-tonnage potential to add to its portfolio."

See let's look at that:

1 - 12-kilometre strike length  -  I usually only see 2 or 3 kilometre strike lengths. 12 is a huge territory, roughly 7.5 miles of strike length!

2- Five grab samples reported by Lodestar from a trench in this area range from 8.9 to 200.5 g/t gold-  200 g/t gold!! Did that just slip by everyone back in June 2009?AMADOR GOLD announced they had found grab samples of 75 g/t gold last week and their stock also traded millions of shares over 3 days.Troyment announced 200 g/t gold or almost 3 times the size of the AMADOR samples.

Now here's a point of interest .. the markets gave AMADOR a .135 share value yesterday on their 75 g/t gold sample & AMADOR has almost 4times more shares outstanding than TROYMET. 

3 - actively seeking partners-  it's common when junior mining companies don't have the cash flow to follow through after a find that they seek JV partners.

Now,I personally don't know anymore about Troymet Exploration than is already in the public record, like the press releases I've quoted from.But one can easily put together a scenerio that something may very well be going on here. And that's what I am gathering from yesterday's trading activity.

In fact, it may be much bigger than Troymet ever imagined themselves, and that's why they are seeking JV partners.And those grab samples are a pretty solid calling card to create JV interest. A 200 g/t gold sample is rare indeed!

Is Troymet the real deal? Yesterday's unusual trading blocks and volume says something must be happening, to what degree exactly, we'll likely all find out sooner than later.

As always, these are only my opinions. And I would encourage everyone to do their own due diligence.Here's a link to the company website  Troymet Exploration Corp.

About The Author: Mike Perras is a former media executive and faculty of business professor. Today he manages the Canadian Stock Alerts blog. It is updated weekdays in real time, and the primary focus is to find stocks with higher than usual trading volume. Mr. Perras doesn't advocate buying the stocks he mentions. Nothing in this article is either designed to meet readers personal financial situations, or intended or taken to be investment advice.

(Disclosure: Long on Troymet Exploration)