All Grade Mining Inc (PINK:HYII) and Stock Mister are in a Bottomless Pit

It’s no wonder that so many small cap companies decide to take on the mining business. Instead of trying to come up with something truly valuable, people who don’t have a clear idea for the future prefer to contrive all sorts of headlines stating that they have obtained rights to mines all over the world with reserves estimated to billions of dollars. They also are happy to say that their interests cost millions and put them in the intangible assets section of their reports thus luring inexperienced investors into thinking that they have a rich company on their hands. That’s not the case with All Grade Mining Inc (PINK:HYII).

Why? Simple – the refuse to tell us anything about themselves. For instance, the latest report that they have filed with the SEC covers the first quarter of 2012. This means that we have no official document stating what their financial situation is right now. Since then some 8-K reports came out of the company headquarters saying that they have made initial payments to the Government of Chile, where their mines are supposed to be, and about some changes in the management team. They also said that they are going to be late with the Q2 financial statement, and now, we’re enjoying the silence, as a famous song once suggested.

We thought that you might still be interested in HYII‘s financials, even though, they are almost 11 months old, so we have included a shortened version of their latest statement:

• no cash
• no current assets
• current liabilities: $915 thousand
• total liabilities: $1.1 million
• no revenue
• net loss since inception: 1.2 million

As far as we are concerned, the company might not exist at the moment. Their website, though active, gives us no up-to-date information, either. The latest press-release, for example is dated July 2012. But let’s assume the unlikely scenario that they are actually performing some sort of operations. The question that springs to mind is “How are they going to dig anything out of the elusive mines?”. Well, according to their financial report from March 2012, they have a total of $328 worth of equipment. We can assume that this will be enough for some shovels and buckets, but we’re not sure about digging tonnes of iron from the earth’s crust. As for leasing machinery, we doubt that equipment leasing companies are too enthusiastic about the idea, since HYII had nearly $5 thousand in cash overdraft, the last time they reported.

That doesn’t stop Stock Mister from giving us a detailed profile of the company management team and telling us that they are extremely competent. Back in 2009 the same management team hired a person called Brett Hamburger who, the reports say, is going to help them immensely with their relations with investors and shareholders. A few minutes’ research on Mr. Hamburger reveals that he is not new to the world of securities and back in 2003 he was sentenced to a term of probation and was forced to pay $290 thousand in compensation for fraud. Apparently, this didn’t teach Mr. Hamburger and in September, he was charged again with assisting in another securities fraud by the SEC. Is HYII Mr. Hamburger’s next hit?

Stock Mister do not include him in the management team review, of course, and they are also not too keen to tell us what happens to companies that they promote. PSYCHIC FRIENDS NET (OTC:PFNI) is a classic example. Stock Mister did create quite a bit of buzz around them back in December, and after a short peak, they fell down like a rock.