The Uncertain Future of First Liberty Power Corp (PINK:FLPC)
A lot of promoters have been pumping First Liberty Power Corp (PINK:FLPC). Over the course of nearly 3 years we have received around 110 promotional emails from all kinds of promoters. And the pump effort seems to be on its rise.
Alongside the pump emails there are also press releases that come every couple of days containing news of current progress and future dreams and possibilities. Now, lets talk about some of the plans that they are allegedly going to pursue. As we informed you in March they had press releases explaining to potential investors their capital strategy and mining plans.
The press release containing their capital strategy unfortunately lacks the information about where the money are actually going to come from. As we mentioned before, due to the lack of revenues this line of credit is most probably going to be acquired in exchange for shares, which will most probably cause dilution of the stock.
Another problem we see is that in their last report filed on March 25 for the three months that ended January 31 the shares of their stock have risen from 169 million to a staggering 323 million. This is an increase of 154 million issued shares which is a reason for concern. Yet another thing that raises concern is the company’s financial state as seen from their most recent quarterly report. The numbers of biggest interest are listed below.
- cash: $2 thousand
- current assets: $40 thousand
- current liabilities: $1.3 million
- revenue since inception: $0
- quarterly net loss: $358 thousand
- net loss since inception: $3 million
It would be a breath of fresh air for their financials if they really have managed to secure a deal for $3 million in financing, however, the cost for this might be too high for the investors that already own shares and are going for the long run. Their current shareholders are being diluted, something I reckon made a lot of people who invested in them before the report was filed angry.
Another thing that you might want to take into consideration is the fact that FLPC announced their pilot project to be on the Fencemaker antimony property that they own. If you do a more thorough research you might start to wonder how they are going to compete on the market. You can do a quick Google search on antimony and read for yourselves about the total reserves of antimony and the big players on that market. According to a U.S. Geological Survey from 2010 the world’s antimony resources will deplete in 13 years and right around 88% of them are located in only 3 countries which are China, Russia and Bolivia with China having a mind-blowing 51% stake.
Taking into consideration the amount of money a company will pay for a Chinese worker’s labor and the amount that will be paid to workers to mine it in the U.S. you might wonder if the cost for the company to produce antimony at their Nevada Fencemaker property will be able to provide a competitive price for the final product on the market.
Yet another thing that raises an alarm is that there is a significant amount of shares owned by John M. Fife, a hedge fund manager who was charged with fraudulent activity and using deceptive tactics in order to acquire hundreds of thousands of dollars for himself and the hedge fund he managed at the expense of other shareholders.
Now it certainly raises a red flag when someone with that past owns 16 million shares in a company you are thinking to invest in. We are not saying he might not have changed since his last brush with the law, however, we are asking ourselves how likely this is. With all that information we are definite that FLPC is a risky stock and that you need to do your due diligence and weigh out the risks for yourselves before buying their stock.
