Todor Pichurov

Energizer Resources, Inc. (OTCMKTS:ENZR) Soars on News

by Todor Pichurov July 30, 2013
2ENZR_chart.pngThe new week was off to a flying start for Energizer Resources, Inc. (OTCMKTS:ENZR, ENZR message board). The stock picked up speed immediately after the open and kept climbing, to end the session on gargantuan volume compared to its average and 153% up by the closing bell.

The company's stock was barely active recently, with average daily trades that you could count on one hand. Then a press announcement sent traders into a frenzy and ENZR traded over 1.3 million shares in a single day. After a couple of months of PR silence, the company announced that it had achieved purity of graphitic carbon extracted from its Madagascar Molo property that was higher than 99.9%. The results came from a test conducted by SGS Canada, Inc. - a testing and certification company that appears to have good reputation and was even chosen as a certification authority in a Canadian food safety program.

While the results achieved in testing are nothing to brush aside, it should be noted that they will in turn lead to a 'process flow sheet' in the next two or three months, which will help improve the expenditure figures in the preliminary economic assessment of the property, with 'preliminary' probably being one word traders don't want to overlook.

ENZR reported the following numbers as of its latest quarterly for the period ended March 2013:

  • $2.1 million in cash
  • $1 million in current liabilities
  • ZERO revenues since inception
  • $2.6 million in Q1 net loss, $73.9 million since inception

The company is an exploration stage enterprise that has accumulated a considerable amount of deficit, a large portion of which comes from stock-based compensation - that alone comprises about 30% of the company's net loss since inception. Some investors may find a lot to dislike about a company that is treating its stock like a free pot of gold, diluting retail shareholders along the way. The wild swing that took place in a single day may also prompt people who entered somewhere along previous volume spikes in February 2013 to cash out around their break-even point, not willing to take any further risks, considering ENZR has been slipping almost non-stop for all of 2013, so traders eyeing the appetizing jump should keep in mind the implied volatility that goes both ways and conduct their own research before doing anything.

42XUII_chart.pngOther stocks that climbed in yesterday's session include Xumanii, Inc. (OTCMKTS:XUII) who are once again going up, closing 28% in the green, after sinking over 50% from their recent highs. Sandborn Resources, Inc. (OTCBB:SANB) managed to close a quarter up in Monday's session, arriving at $0.45 per share.

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