Spartan Gold Ltd (PINK:SPAG) With a New Promotion

On the right you should be able to see Spartan Gold Ltd (PINK:SPAG)’s stock performance over the last three years and it’s pretty obvious that they have been following something of a trend. The downfall was triggered back in May 2011. Can you guess what the reason for it was? Yes, there was a paid promotion for them. Quite a lot of emails were sent and quite a lot of money was spent, but the end result is pretty obvious.

That said, the pump from a couple of years ago was not the only issue that SPAG‘s management has had to deal with. The company started off with the goal of producing bio fuels – a sector that is currently quite hot, but in 2010, they decided that this isn’t really what they want to do and, as the current name would suggest, they are now dealing with development and exploration of gold properties. They have lease agreements for a couple of mines in the US, but unfortunately they will need quite a lot of cash in order to properly start operations.

According to a press release that was issued recently, SPAG‘s controlling shareholder, Sphere Resources, Inc have signed an agreement with an investment firm that will give them up to $10 million which they can use for SPAG‘s exploration venture. That said, back in 2011, SPAG themselves signed an agreement that was supposed to give them the option of selling up to $5 million worth of shares to another investment entity. Things did start well and SPAG issued $500 thousand worth of stock, but then, the agreement needed to be canceled due to lack of interest from the investment firm.

SPAG should keep their fingers crossed that the same thing doesn’t happen again since, as we read from their latest financial statement, they need some money as soon as possible. Here are the most important financials as found in their latest 10-Q covering the third quarter of 2012:

• cash: $5 thousand
• current assets: $5 thousand
• current liabilities: $695 thousand
• revenue since inception: $0
• quarterly net loss: $195 thousand

Their financial woes didn’t start yesterday, which means that they were forced to accept a stock incentive plan according to which the services of directors, officers and consultants will be paid in common shares instead of money. This means that when they had to pay for the development of one of their properties back in 2011, they had to issue a whopping $15 million worth of stock. That increased the number of outstanding shares by a staggering 20 million, but there is still no operations, hence no profit.

Having that in mind, even if the $10 million investment is secured, we are still not sure that this amount will be enough to cover all the expenses, especially considering the the couple of notes that are currently in default.

All these facts really make us wonder why did AllPennyStocks go through all the trouble of putting together such a long email about SPAG but, then again, we’re sure that the $8 thousand compensation was motivational enough. It’s not the first time that they have tried to lift a stock that is all but dead from the ground. The last time they did it, the featured company was Crown Marketing (PINK:CWNM). Before AllPennyStocks’ attempt to bring CWNM back to life, the ticker had been all but crushed by previous pumps and, as you can see from the chart on the right, the AllPennyStocks’ attempt was a miserable failure as well.