First Liberty Power Corp (OTCMKTS:FLPC) is Coming Back to Life
We last wrote about First Liberty Power Corp (OTCMKTS:FLPC) in April and it’s fair to say that back then, things weren’t particularly optimistic. The company’s financial statement didn’t look like much, the ticker was deep in double-zero territory and although the management team was desperately trying to convince people that exploration activities at the Fencemaker property are going to start really soon, investors seemed somewhat reluctant to believe the press releases (probably because of the promotional campaigns from 2011 and 2012). Dilution was also a problem and, all in all, it seemed as if nothing could possibly push the ticker above the $0.01 per share mark once again. We’re seeing some interesting volumes around FLPC at the moment, so we decided to check and see if anything has changed over the last six months.
The price has certainly gone up. Not only is it above $0.01 per share, but it’s now north of $0.03 per share. FLPC has been on an upward trend since mid-July and this was particularly noticeable last week when five positive sessions pushed the value from $0.0179 all the way to $0.0314 per share. That’s an increase of 75% in just a week and it’s the sort of behavior often associated with paid promotions.
This is where the really good news comes in – there seems to be no traceable pump campaigns for FLPC at the moment. There was an email alert sent out by Lions of Wall Street on October 14 but although they seem as optimistic as ever, we reckon that they simply saw the accumulation of interest from the investing public and decided to take advantage of it. In any case, last week’s run is definitely not the result of a paid pump.
Pump or no pump, there’s certainly quite a lot of excitement and it could only have been caused by the torrent of good news coming out of FPLC’s HQ. A total of ten announcements have been made in two and a half months and, without a doubt, the most exciting one was published on October 15 when they said that they have detonated the first blast at the Fencemaker property. This means that FLPC is not your typical mining penny stock anymore – they have operations and they should have revenues in the future financial statements.
Unfortunately, while FLPC is not the typical non-operating small cap mineral exploration company, it does boast the balance sheet we’re normally used to seeing from such ventures. Here’s how things stood as of April 30:
- cash: $7 thousand
- current assets: $19 thousand
- current liabilities: $1 million
- no revenue
- quarterly net loss: $450 thousand
The reports to follow should give us a better understanding of how things are going, but in the meantime, potential investors and shareholders should have something else in mind – dilution.
When we last covered FLPC, we mentioned that share issuance has been something of a daily activity and right now, we can see that pretty much nothing has changed. They recently increased the authorized stock to over 1 billion shares and as of October 18, they had 525 million shares outstanding. 255 million of those were issued during the nine months ended April 30 as a conversion of debt at an average rate of under $0.004 per share.
This, coupled with the hints of further dilutive actions and the uncertainty around the profitability of the mining activities that started just a couple of weeks ago, means that the shareholders’ investments could get crushed really quickly. The discounted conversion rate on the notes might also prompt some profit taking which could depress the price even further down. All in all, the news coming out of the company HQ suggests that things are moving along nicely, but unfortunately, a potential FLPC investment is anything but risk-free. Make sure you think things through carefully before making any decisions.
