Borislav Tonev

All American Gold Corp (OTCMKTS:AAGC) Wasn't Third Time Lucky

by Borislav Tonev August 27, 2013
3AAGC.pngBack in September 2011 a number of newsletters initiated quite a big promotional campaign on All American Gold Corp (OTCMKTS:AAGC, AAGC message board). Despite the amount of touting and the tasty compensations that some of them received, the whole proceedings turned into a fiasco really quickly. On September 1, 2011 AAGC's price hovered around $0.80, but just a month later, it was down by about 73%. The promoters tried again towards the end of April 2012, and while this time, the campaign was quite a bit smaller, it too morphed into a bloodbath in a matter of a couple of sessions.

With that in mind, we weren't expecting much when we received yesterday's promotional emails from Stock Mister, The Stock Braniac and Premier Equity Reports and, as is evident from the chart, the ticker didn't really show much in the way of performance. It opened the session at $0.01, made an extremely short run to around $0.02 after which it came crashing down and demolished around 58% of the value. The fact that the intraday high of $0.025 is really close to the 52-week high of $0.028 offers little condolence to the people who lost more than half of their investment after just six and a half hours of trading. But let's see if there is anything that could stop AAGC's plummet.

Right now, we're struggling to see such a thing. As of the time of writing this article, their website seems to be down and it gives us a notification that the domain name has expired and is awaiting renewal or deletion, which is something of a blow to the credibility of the company. That said, we don't need their website to check out the SEC filings and having done that, we can see the reason for the internet portal outage - the lack of cash. Here are all the figures contained in AAGC's 10-K covering the twelve months that ended on May 31:

  • cash: $946
  • total assets: $1,003
  • total liabilities: $83 thousand
  • no revenue since inception
  • yearly net loss: $53 thousand

With these sort of numbers in mind, it becomes very difficult to trust your money with AAGC but when you check out their operational history (or rather, the lack of it), things become even trickier. Throughout the years, they have signed agreements with a variety of ventures and individuals for the exploration and acquisition of mineral rights scattered throughout the US and Canada. They did try to drill a few holes at some of the properties but for different reasons they decided that none of the sights are worth investing into. This means that right now, the 10-K quotes: "We are currently seeking other projects and mineral interests in which we may become involved that will have merit as potential positive mining projects.". Quite frankly, we're struggling to see how they'll manage to find positive mining projects with only $1,003 in assets.

AAGC_HQ.pngThe yearly report also says that their principal office is located at 514 Enfield Road, Delray Beach, FL 33440-2840 and according to AAGC's management team, the facility there is "satisfactory, suitable and adequate" for their needs. That may be so, but there's no getting away from the fact that it is a residential house as is evident from the picture on the right and we can't say that having it as a company HQ is exactly confidence-inspiring.

What will happen next? Well, as a general rule, promoted penny stocks are extremely unpredictable. AAGC might bounce against all odds like Essential Innovations Technology Corp. (OTCBB:ESIV) did yesterday or it might sink further down like Affinity Mediaworks Corp (OTCBB:AFFW) and obliterate even more unfortunate investors. Whatever happens, we can safely say that performing an extensive research and a lot of due diligence is absolutely essential before making any decisions that might prove costly.

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