Mammoth Energy Group Inc (PINK:MMTE) Acquires Lithium Sites, Stock Jumps 15%
By Martin Tsvetkov
Date: May 27, 2011
Not long ago, Mammoth Energy Group Inc (PINK:MMTE, MMTE message board) relied exclusively on promotions to boost its stock. Now, the company appears to have taken a more orthodox approach to achieve the same goal.
Yesterday, MMTE stock gained 15%, closing the session at its last week level of $0.0024 per share. The surge in price triggered a spike in volume as well. By the end of the trading session, the turnover went beyond the 245 million mark, registering a 230% increase over the daily average trading volume.
As mentioned above, MMTE has not resorted to paid advertising services for quite a while now.
Instead, it has focused on becoming as transparent as possible, both in terms of news and financials. That is why MMTE's positive run yesterday might have been caused by the press release which popped up beforehand. The latter informed investors that MMTE had completed the acquisition of 13 Chilean lithium concessions spanning 3500 hectares. The announcement came one week after MMTE concluded its DD on the properties.
Being a development stage company, Mammoth Energy Group Inc. specializes in acquiring and developing lithium-rich sites both within the US and internationally. Presently, its main assets are located in Chile. MMTE's mid- to long-term strategy is to become a leading supplier of alternative energy. Yet, it has a long way to go before turning its idea into reality.
Although MMTE has become much more diligent in carrying out its financial policy, its latest report shows how fragile the company is. As of Mar. 31, 2011 its balance sheet shows:
$38K in assets;
$261K in liabilities;
zero revenue and a quarterly net loss in excess of $219 thousand.
The overall financial picture indicates that, at least, MMTE has finally acquired some assets. Yet, the company will have to find a suitable way to raise additional capital in order to explore its Chilean properties to the fullest. Considering that it has so far only issued 30% of its 15 billion authorized shares, it will hardly encounter any significant problems in securing additional financing, even if it leads to dilution.
