After entering the oversold zone two days ago, Mustang Alliances, Inc. (OTC:MSTG
, MSTG message board
) quickly got out of it yesterday, triggering a big-budget promotional campaign
MSTG closed the latest trading session at $0.70, up 16.47% from its Tuesday close.
A total of 254 thousand shares changed hands, which proved sufficient to kick MSTG out of the oversold section on the charts. Now, a single third party has compensated a large group of promoters an astonishing $300 thousand to push MSTG stock to the limits.
Occupying the mining industry, Mustang Alliances, Inc. is primarily focused on exploring and developing high-potential gold and silver sites in Honduras. Currently, the company holds in excess of 4,400 hectares in a strategic region in Central America which is known for its large deposits of gold and silver in the past.
Last Thursday, MSTG submitted a notification of late filing of its 10-K report for the 2011 fiscal year. As of today, the document still has not been published, which is why MSTG's most current financial report is the 10-Q form covering the three months ended Sept. 30, 2011. The document showed:
- $62K in cash and equivalents;
- $99K in current assets vs. $27K in current liabilities;
- good leverage D/E ratio of 0.37;
- net quarterly loss of $323K.
For a company pretending to explore for gold, the aforementioned numbers do not sound serious at all. While MSTG seems to have really insufficient capital to carry out large-scale operations, its net loss is substantially higher than its reserves. That is why, the company might have trouble raising external capital even though it is by no means highly leveraged.