Hristina Beeva

Quarterly Results Give a Leg Up to Maxwell Resources, Inc. (OTC:MAXE)

by Hristina Beeva December 3, 2012
Penny stocks operate on novelty, and the newest financial report lifted Maxwell Resources, Inc. (OTC:MAXE, MAXE message board) out of a series of falls in the past two weeks. The new report shows a marked difference from last quarter's results, but still holds enough red flags to merit a warning against too much optimism.  MAXE1203.png

The company, an exploratory stage miner, started its work with very little resources. Its latest filing show it may be more capable of following its mission:

  • $932,867 cash
  • $38 million mineral assets (an estimate)
  • $125 total liabilities
  • Zero revenues
  • $62, 769 net loss GMXS1203.png

The company's cash reserves ballooned, from a mere $277 for the past period and the reason seems to be a sale of common stock, some of the proceeds going toward expenses and the rest filling in the cash reserves. The improved financial situation may have helped Maxwell Resources to reach experts from respected geological expert group Golder Associates, but so far the research is very preliminary and marketing success or even the richness of the gold prospecting site.

Before searching for gold, MAXE went under the name of Mericol, Inc. and offered a method for 3D printing and prototype production. In its new incarnation, the company launched a much-hyped investor site, again with little potential material effect on its business. It now relies on the success of the Raton Basin site in New Mexico, while it is still unclear which of the minerals there- the gold, silver, rare metals or coal would be providing the best profitability.

MAXE has authorized 75 million new shares in the last quarter, at $0.001 par value. With prices ranging from $1.60 to a little below $1, selling those shares may translate to significant proceeds, as we saw in the case of dramatic cash reserve increase in a single quarter. This company is not running on gold, silver or coal but on investors' losses.

Gold prospecting is hot amid penny stocks with the metal reaching significant heights on commodity exchanges. Thus, a giant promotion for a company similar to MAXE is easily explained. The stock of Gemini Explorations Inc. (PINK:GMXS) was the selection of ClubPennyStocks and has lost so far 30% from its post-promotional height, showing it's best to explore the company's true business before committing to the hype of an email.

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