Bullfrog Gold Corp (OTCMKTS:BFGC) Makes Another Jump

Back in November 2012, Bullfrog Gold Corp (OTCMKTS:BFGC) displayed a sudden surge recording daily gains of no less than 47% on a trading volume of over 3 million shares. In July, we saw a similar thing when the ticker increased its value by 26% in just six and a half hours while the number of shares changing hands reached 3.8 million. Yesterday wasn’t quite as dramatic. Trading volume for the day stands at 1.6 million shares while the price increase is just 10%, which, let’s face it, is not the biggest run ever seen in Pennyland. The total trade value, however, exceeds $490 thousand which means that quite a lot of money have gone into the stock. We decided to see if we will find the reason for all the excitement.

Until minutes before the start of today’s session, there was nothing immediately obvious that could arouse the investors’ interest. Then, some emails started flying in. The first one was sent by Jet Life and in it they say that they have alerted investors about BFGC over the social networks about a week ago. We can see that there’s definitely been quite a lot of talking about Bullfrog over the social media, but apart from yesterday’s volume spike, the effects on the ticker have been minimal. Now with the emails, however, things might just be a little bit different despite the fact that, according to Jet Life’s disclaimer, there are no third parties paying for the raised awareness. The question is: “Is BFGC going to go up or down under the pressure of all the hype?”.

We started looking for hints in Jet Life’s selection of previous picks and we found that the last time they touted a stock for free, it was the one of Artemis Energy Hold (OTCMKTS:ARTT). The emails were received on September 11 and since then, ARTT has lost around 62% of its value.

Other, more recent promotions done by Jet Life include Eyes on The Go Inc (OTCMKTS:AXCG) and mLight Tech, Inc. (OTCMKTS:MLGT) and although these two were paid pumps, they should give you an idea of how badly the promotional pressure affects penny stocks. Time will tell if BFGC is in for a similar drop, but while we wait to see what happens, we might as well open the SEC filings and see what the company has to offer.

And we should point out at this point that there are some good news. We go through quite a lot of mineral exploration companies every day and we often see ventures that are neck-deep in debt and in a desperate need of cash. With BFGC, that’s not strictly the case. Here are the figures found in the 10-Q covering the second quarter of 2013:

• cash: $728 thousand
• current assets: $825 thousand
• current liabilities: $74 thousand
• no revenue since inception
• quarterly net loss: $331 thousand

You can see that there’s more than $750 thousand in working capital and when you compare the figures above with the ones found in previous reports, you’ll see that a large part of the financial statement has been improved.

It’s not all positive though. BFGC were forced to raise some cash through the sale of quite a lot of equity. Some units consisting of common stock as well as warrants were purchased by unnamed investors and, having in mind the fact that revenues will not come at least until the end of the year, the dilution might prove to be quite severe.

That’s why, considering the risks and staying away unless you can afford the losses is probably your best bet. Especially while the promoters are involved.