U.S. Precious Metals, Inc. (OTCMKTS:USPR) Goes Up
U.S. Precious Metals, Inc. (OTCMKTS:USPR) has been happily climbing up the stock chart for some time now. In just four weeks they doubled their price per share and on Friday closed at $0.22. The prolonged trend comes after a steady slide downwards since the start of the year that culminated on April 16 when the stock opened at $0.1.
In the absence on any paid promotions the main reason for this resurgence must be the quarterly report that the company filed for the period ending February 28. While we expected something quite positive to explain the return of confidence in the stock, what we actually found couldn’t be further away from encouraging. USPR reported the following results:
- $17 thousand cash
- $26 thousand total current assets
- $3.7 million total current liabilities
- $4.6 million net loss for the nine months ending February 28
- $no revenues since inception
The no revenue part is not something surprising having in mind USPR is an exploration stage company. No, the problem is that the company has been in business for 15 years now and it still hasn’t managed to turn a profit. Even worse – they haven’t been able to demonstrate the existence of any proven or probable reserves of precious resources at their Solidaridad property in Mexico.
Currently the company is in quite a desperate need of funding. They defaulted on a promissory note that with the accrued interest amounts to $900 thousand. On January 31 they failed to make the required payment for the mining rights to their property, which is quite unfortunate for a mining company. Last but not least, USPR once again failed to pay the first installment of $400 thousand to their former attorneys so the entire sum of more than 1 million becomes due and payable.On top of that on back in April, 2012 a lawsuit was filed against them in Mexico, the plaintiff claiming he didn’t receive his contracted compensation so the ownership of the mining concession should revert back to him.
With no source of fresh capital USPR had only their common stock to rely on. For the nine months preceding their report, the company managed to sell 4.2 million of its shares and 2 million of warrants convertible after six or twelve months. Investors should be fully prepared for even greater dilution. On a more promising note, USPR have somehow initiated the full payment due to the Mexican authorities for the Solidaridad mining concessions. Currently it is doubtful for how long the ticker will manage to support such a high price. A sharp and sudden correction may come at any time making investing in USPR a risky venture whiout doing your own research beforehand.
