Maverick Minerals Corp (OTCMKTS:MVRM) Gets Pushed by a Free Pump

Between October 9, 2013 and January 9, 2014, Maverick Minerals Corp (OTCMKTS:MVRM) managed to register a total trading volume of less than 30 thousand shares and absolutely no movement in terms of share price, meaning that it was just one of the many dormant tickers on the OTC Markets. On Friday, Stock Mister and OTC Rockstar decided to change all that.

Two promotional emails hit our inbox minutes after the start of January 10’s session and they triggered what can only be described as a trading frenzy. 367 thousand shares changed hands in just six and a half hours while the price skyrocketed by a whopping 766%. At 192%, the daily gains from yesterday’s session aren’t quite as impressive, but we can safely say that the chart movement was even more eventful. MVRM opened the day at $0.26, ran to a mind-bending high of $3.55, but then plummeted to the ground and finished the day at $0.76 while racking up a dollar volume of around $452 thousand.

It’s clear that the pressure above $1 per share is a bit extreme for MVRM, but does it have what it takes to hold its current position?

MVRM is a mineral exploration company seeking to acquire and develop oil and gas properties in the US and Canada. Back in 2012, they signed a Joint Venture agreement with an entity called Energold Minerals Inc (not to be confused with Energold Drilling Corp. (CVE:EGD)) and, if they manage to stick to the terms of the contract, they could potentially acquire 51% interest in the Jarvis Island Property which is located near Ontario, Canada.

We read in the latest 10-Q that they are so far current with the obligations, but looking at the balance sheet, we can see that they might have some problems in the future. Here’s a summary of MVRM‘s financial situation as of September 30:

• cash: $2,386
• current assets: $6,386
• current liabilities: $491 thousand
• quarterly revenue: $12 thousand from consulting services
• loss from operations: $62 thousand

As you can see, they have to satisfy nearly $500 thousand worth of debt over the next twelve months and they also say that they’ll need an additional $400 thousand if they are to continue as an operating entity. In any case, the figures above are far from sufficient to justify the overstretched market cap which, at yesterday’s close, stands at around $12.2 million. But is there anyone who can profit from it?

The answer is yes. As part of the joint venture agreement, Energold Minerals received quite a lot of stock and there are a few other transactions you should probably keep in mind. On October 29, 2012, for example, Energold converted around $303 thousand worth of debentures into more than 3 million shares of MVRM stock. As you might have calculated already, the conversion rate stands at around $0.10 per share which is a huge discount compared to the current levels. If these shares were to hit the open market, they could have an absolutely devastating effect on the ticker’s performance.

Which, by the way, won’t be that much of a surprise considering the promotion from Stock Mister (SM) and OTC Rockstar. SM decided to finish 2013 by touting Streamtrack Inc (OTCMKTS:STTK) as a “Monster play”. As you can see from the chart on the right, that might not be a really good description. OTC Rockstar’s latest 2013 pick, on the other hand, is called Ironwood Gold Corp (OTMKTS:IROG) and, if anything, its performance has proven to be even worse.

Make sure you do a lot of due diligence and weight the risks carefully before committing to an investment in MVRM.