North Springs Resources Corp. (NSRS)

[zomniac]

North Springs Resources (NSRS)
http://www.pennystockresearch.com/pump-and-dump-alerts-january-6-2012-nsrs-apii-frog/

Wickenburg, Arizona… once known as the “Dude Ranch Capital Of The World” is back in the news. It seems modern day prospectors are following in the footsteps of Henry Wickenburg, the famous prospector who struck gold in the town that’s now named after him.

Back in 1862, the gold rush along the Colorado River was in full swing… and Henry Wickenburg hit pay dirt at what’s now known as the Vulture Mine. In fact, the Vulture Mine has produced over $30 million in gold over its lifetime.

Fast forward to present day and it seems North Springs Resources believes there’s still more gold to be found nearby…

On December 29th, NSRS entered into a joint venture agreement with DNP Mining to conduct mineral exploration on what’s known as the Goldstar property. Goldstar is in the same town as Vulture Mine… Wickenburg, AZ.

Through their agreement, NSRS will acquire a 20% working interest by paying an aggregate of $500,000 in the funding of phase 1.

That’s where the problem comes in…

As of their latest report, North Springs Resources has $16 in cash. That’s right… $16.

But never fear, the company did find a way to further finance the deal. Right after NSRS cancelled 80 million outstanding shares of common stock (on Dec 28, 2011), the company issued a 10% convertible promissory note to Kazuo Holdings, Inc… giving NSRS access to $1 million!

That’s great, except they’ll need to pay 10% interest a year on it… and if they default, Kazuo will be able to convert their debt into shares of common stock.

That seems like a good reason for NSRS to cancel 80,000,000 shares of common stock.

You see, if they fail to strike gold or generate revenue in the next year… they’ll owe Kazuo $100,000 (they took all $1 million of the note by the way). So unless they keep $100,000 aside to pay the interest on the note, Kazuo can convert the debt to shares.

Now let’s do a little math…

The company has to pay $500,000 to meet their obligation in the joint venture. $100,000 was paid at the end of last year. And $400,000 is due today… January 6th. So that leaves the company with $500,000 right?

Well, they’re going to have to pay $100,000 to Kazuo by the end of 2012 to avoid default. So that would leave $400,000. But NSRS still has $108,770 in liabilities (other notes, accounts payable, etc). If we pull that number out, we’re down to around $300,000.

Now quarterly expenses, as of the latest filing, look to be around $50,000. However, if they’re running a stage one exploration, that expense will probably rise. Even if it remains at $50,000, that adds up to $200,000 for the year.

It sure looks like cash levels at NSRS will be down to $100,000 by the end of the 2012.

And that’s assuming no increases in expenses at all…

Here’s the problem… If NSRS actually finds gold, they’ll need to come up with $3 million to proceed to phase 2 (as per the agreement). And where do you think they’ll get that cash?

Most likely, NSRS will do one of two things. They’ll either issue more shares of common stock, or float yet another convertible note.

The bottom line…

NSRS share are headed for a fall!

If it’s not enough that NSRS is a long way from producing revenue from mining operations, let alone earnings… I have one last reason why you should be leery of investing in this company. Nahulate S.A. paid Free Penny Alerts $600,000 to hype NSRS shares for just one month.

If Nahulate S.A. felt that strongly about the company, why didn’t they just invest in operations directly? Think about it… $600,000 would have covered the cost of North Springs Resources’ commitment for stage one development.

My guess is they really don’t care about the success of a company with $16 in cash. Instead, they’re really interested in their own gold mine… bilking unsuspecting investors. By pumping up shares of NSRS, they can then sell them off at a huge profit.

Remember, with 694 million shares outstanding, the market cap for NSRS is over $240 million. And $240 million is far more than NSRS could hope to see in earnings, even if they struck gold tomorrow.

Companies like Nahulate S.A. know it. That’s why they’re running scams to pump shares of companies like NSRS. This is truly a case of Caveat Emptor… buyer beware!
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NSRS by 22 News Letters

Promoted Date Symbol Promoter Name Compensation
1/4/2012 NSRS Surf Up Stocks none listed
1/4/2012 NSRS Killer penny Stocks Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Explicit Penny Picks Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Free Investment Report Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS GladiatorStocks Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Ox of wall street Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Penny Stock Alley Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Stock Pick Trading Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Titan Stocks Paid $600,000 by Nahulate S.A.
1/4/2012 NSRS Awesome Penny Stocks Paid $600,000 by Nahulate S.A.
1/3/2012 NSRS Killer penny Stocks $600,000 by Nahulate S.A.
1/3/2012 NSRS Awesome Penny Stocks $600,000 by Nahulate S.A.
1/3/2012 NSRS Penny Stock Expert $600,000 by Nahulate S.A.
1/3/2012 NSRS Penny Stocks Finder $600,000 by Nahulate S.A.
1/3/2012 NSRS Secret Penny Stocks $600,000 by Nahulate S.A.
1/3/2012 NSRS GladiatorStocks $600,000 by Nahulate S.A.
1/3/2012 NSRS Ox of wall street $600,000 by Nahulate S.A.
1/3/2012 NSRS Penny Stock Alley $600,000 by Nahulate S.A.
1/3/2012 NSRS Free Investment Report $600,000 by Nahulate S.A.
1/3/2012 NSRS Titan Stocks $600,000 by Nahulate S.A.
1/3/2012 NSRS Bull In Advantage, LLC none listed
1/3/2012 NSRS Stock Mister none listed