First Liberty Power Corp. (PINK:FLPC) Takes a Breather, Climbs Again

After a breather of two days, First Liberty Power Corp. (PINK:FLPC) was on the rise again, adding nearly 67% to claw back some of its losses and stand at $0.0014. The ticker remains a risky underpriced bet, and with large volumes may move vigorously in the next few days.

As with other small cap mining companies, FLPC relies on loud hype and serious-sounding projects, but seems to lack the funds to get a value-added product to market:

• Zero revenues

• $362,069 operations loss

• $1.5 million market cap

• $28,470 cash

• $1.5 million current liabilities

The rise in FLPC was aided by a no-compensation promotional email from Wisealerts, and from then on the double-zero ticker was attractive enough to continue the active trend from the past couple of months.

Unfortunately, we won’t know more about the current situation of FLPC, since its latest filing is a warning for inability to file quarterly results on time. Recently, FLPC promised that antimony mining will start soon, and that lithium, uranium and others would follow soon. It is unknown how the company has managed to secure the $2.6 million funding that was mentioned in its press release, but there is a mention of an upcoming “structured finance” deal for a total of $3 million. Given the company’s lack of revenues, such a line of credit may be exchanged for shares, at the danger of dilution and insider selling. We are yet to see this change in the filings, when FLPC is ready to publish them.

In the past days, FLPC has spiked as much as 134%, and may be memorable enough to attract investors for fast deals. A similar case happened with National Graphite, Corp. (OTC:NGRC), a heavily promoted graphite prospector with only preliminary mineral interests. The NGRC promotion ended with a significant fall in price, and the stock continued to be traded erratically, with days of sharp increase and fast corrections on selling.

Penny stock mining companies often mention US-based mining of rare or strategic minerals as a viable business decision, but in reality several imported minerals may not be easily replaced by domestic reserves. It is best to estimate your own acceptable losses before believing a penny stock would benefit from real mineral extraction revenues.