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Tanzanian Royalty Exploration completed construction of its heap leach pad at its Buckreef project.

I had anticipated that the company would move this project towards production.

The company still needs to answer for its promise to bring its Kigosi Project into production in 2014 and its financing plans for the rest of Buckreef.

Despite the fact that the stock has fallen from $3.60/share to $2.20/share I continue to believe in the short thesis.

Tanzanian Royalty Exploration (NYSEMKT:TRX) just announced that it has completed constructing its heap leach pad at its flagship Buckreef project. This brings the company one step closer to production at this project.

Despite this development, I continue to believe - as I did last September - that this is a viable short candidate. As of the company's last financial report in May it only had about $4 million in cash, which begs the question: Where is the money coming from to develop the Buckreef Project? The company will almost certainly need to raise capital soon, and this will likely dilute shareholders.

Investors were also told that another one of the company's projects - Kigosi - would be producing on a small scale starting this year, and yet there hasn't been any news whatsoever on this front.

In short, despite the completion of the heap leach pad, there continue to be several issues from financing to valuation - the company reports that the Buckreef Project has an NPV of $150 million at a low discount rate, of which only $88 million is attributable to the company. With its $223 million valuation, and with these concerns, I think the shares should be avoided. Furthermore, until the company addresses the issues I've just mentioned, I think more aggressive investors can consider shorting the stock despite the fact that the shares are down almost 40% since my last short recommendation.