Will the Market Notice Applied Minerals, Inc. (OTCMKTS:AMNL) ?

For quite a while Applied Minerals, Inc. (OTCMKTS:AMNL) has been flying under investors’ radars. Daily traded volumes have been minimal while the dollar volume rarely surpasses $20 thousand. Right before the start of today’s trading though the company issued a PR in which they announced a $12.5 million financing deal. Such a vast amount of funds is rarely seen in the world of pennystock but will it be enough to attract the attention of the market?

Let’s start with the terms of the deal. AMNL sold convertible notes in exchange for $12.5 million. A huge positive sing is the fact that all of the investors who bought the notes were existing stakeholders in the company and furthermore the conversion price has been set at $0.92. At the moment AMNL trades at $0.74. As part of the deal 5 million warrants with an exercise price of $2 were cancelled.

The company is also keeping the issuance of new shares under control and for the first half of the year less than 300 thousand new shares have seen the light of day.

The current financial injection may be impressive but it won’t be able to sustain AMNL for long if their operations don’t improve. The company finished the quarter ending June 30 with:

$3.2 million cash
$3.5 million total current assets
$2.7 million total current liabilities
$48 thousand revenues
$3 million net loss

It should be obvious that they are far from becoming a profitable entity. The massive net loss has been quickly eating through their cash reserves. The accumulated deficit during the exploration stage is already higher than $45 million.

AMNL will have to do a lot more in order to boost investors’ confidence in their stock. The negligible revenues and the mounting losses simply cannot be ignored.