Borislav Tonev

Diamante Minerals Inc (OTCBB:DIMN) With an Impressive but Strange Climb

by Borislav Tonev April 8, 2015

On February 4, Diamante Minerals Inc (OTCBB:DIMN, DIMN message board) hit a 52-week low of $0.90 per share. Since then, it's been among the most consistently performing stocks on the OTC Markets. Red sessions have been virtually non-existent over the last two months, and although, generally speaking, the stock has been somewhat illiquid, we have seen some increased interest recently. Yesterday, for example, DIMN gained another 2.8% and it finished the day with a price of $2.19 per share on a dollar volume of around $316 thousand.

Apparently, people aren't too bothered about the stock's relatively high price and the swelling volumes suggest that DIMN's fan base is growing. The problem is, this doesn't seem to be caused by anything substantial.

The latest press release, for example, is four and a half months old. There are no traceable promotions and the recent filings aren't particularly impressive. So, if you are jumping in right now, you're probably hoping that the Joint Venture agreement that DIMN announced back in November 2014 will yield some massive results. The only problem is, if Diamante is to take part in the JV, it will need to pay at least $1 million. And the latest 10-Q shows that at the end of January, the company didn't have this sort of money. Here's what it did have:

  • cash: $800 thousand
  • current assets: $801 thousand
  • current liabilities: $132 thousand
  • NO revenue since inception
  • quarterly net loss: $193 thousand

So, the shareholders can do little more than hope that the management team will be able to raise the necessary cash and get the ball rolling. Sadly, this might be a problem for some.

DIMN's CEO is called Chad Ulansky and when he took the helm five months ago, the company described him as an 'exploration veteran.' A quick Google search reveals that he is indeed no stranger to mining companies traded on the Canadian stock exchanges. He has been involved with Cantex Mine Development Corp. (CVE:CD), Metalex Ventures Ltd. (CVE:MTX) as well as a few other entities. The common thing between these companies is that neither of them appears to be particularly successful.

Maybe this time, Mr. Ulansky will be able to bring better results, but while you're waiting to see what will happen, you might want to bear one more thing in mind.

DIMN was once called Oconn Industries Corp and it wanted to provide online matchmaking and relationship services. Back in 2012, when the company was still private, Oconn sold 5.2 million shares of common stock for total proceeds of $26 thousand (or $0.005 per share). Then, when it was trying to have its stock listed on the OTC Markets, the shareholders who bought the 5.2 million shares offered them to the public at a fixed rate of $0.01 apiece.

Thanks to the 4 for 1 forwards split from April 2014, the 5.2 million shares were transformed into 20.8 million shares. And they were initially bought for just $26 thousand.

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