Energizer Resources, Inc. (OTCMKTS:ENZR) Retreats by a Fifth

After a PR-fueled jump that more than doubled the stock price of Energizer Resources, Inc. (OTCMKTS:ENZR) on Monday, yesterday the stock was pressed a sobering 20% down on even heavier share volume.

After a very idle July in terms of share volume, ENZR came up with a press announcement about tests conducted on source material from its Madagascar Molo property. A Canadian testing and certification authority undersigned the tests and the claims that a single-pass purification process yielded graphitic carbon with purity that was over 99.9%.

Investors were immediately kicked into a frenzy by the announcement and, possibly overlooking the early stage of development both the company and the property are at, they went to stock up on ENZR. The company is an exploration stage mineral mining enterprise with no revenues generated since inception. Here is what the company’s financials looked as of its latest report for the quarter ended March this year:

• $2.1 million in cash
• $1 million in current liabilities
• zero revenues since inception (March 2004)
• $2.6 million in Q1 net loss, $73.9 million since inception

About a third of the cumulative net loss since inception comes in the form of stock based compensation. In the first quarter of 2013 alone ENZR recorded another $1 million in expenses coming from stock compensation. While something like this hardly bothers short-term traders who hop in and out of stocks, squeezing profit where they can, the rather generous stock compensations the company hands out may put off investors looking at ENZR in the longer term.

An added reminder is that despite the testing results reported, the company is still conducting the preliminary assessment of the property and their latest official filing concerned with the matter states that until validated otherwise, the properties have no known mineral reserves and are still being explored.

ENZR is currently flat in early trading.

Other stocks that retreated in double digits on Tuesday include Liquidmetal Technologies, Inc. (OTCBB:LQMT) who dropped 12% to a close of $0.14 per share. February pump fiasco Primco Management, Inc. (OTCBB:PMCM) dropped 21%, wiping about half of the gains made in Monday’s excited jump.