Suburban Minerals Corp (OTCMKTS:SUBB) Pushed by a Paid Pump

SUBB.pngLexington Energy Services, Inc. wasn’t the best investment option on the OTC Markets. It was in the mineral exploration industry for a couple of years and all it managed to do during that period, is go through a paid promotion in 2012 which, predictably, resulted in a rather horrific stock performance. In terms of business, the company did log some revenues, but unfortunately, expenses were quite significant which, in turn, led to millions of dollars in losses and some pretty disappointing balance sheets. Back in March 2013, the management team decided that they can turn things around by changing the name and acquiring a new ticker symbol. Thus, Suburban Minerals Corp (OTCMKTS:SUBB) started trading on the OTC Markets.

Predictably, the new symbol failed to grab too much attention and SUBB remained virtually dormant throughout 2013. The start of the new year, however, brought a change. The stock is now experiencing decent daily volumes and although the performance was quite shaky at first, it did manage to register a healthy 24% increase in price over the last two sessions.

When you take a look at our database, you’ll see that this isn’t really that much of a surprise. More than forty emails from a range of promoters have hit our inbox since January 7 and it’s clear that all the touting is starting to pay off. The more prominent outfits that have taken part in the pump include Damn Good Penny Picks and Penny Stock Prophet and the total budget, according to database, amounts to $124,500.

The whole brouhaha is created by a Letter of Intent that the company recently signed with an entity called World Sports Alliance (WSA). According to the agreement, SUBB should acquire a producing diamond mine in the Central African Republic. It will involve the issuance of a massive number of shares and you might think at this point that, since WSA is an intergovernmental organization, the contract is a guarantee for SUBB‘s success.

When you do a bit of research, however, you’ll see that this isn’t strictly the case. Ghana Gold Corp. (now known as BrightRock Gold Corp (OTCMKTS:BRGC)) signed a similar Letter of Intent back in April 2013, but, as you can see from BRGC‘s filings, their business is not exactly flourishing at the moment.

Still, the acquisition (which should be closed by next Tuesday) will give SUBB something to operate on and, potentially, a much-needed source of revenues. The fact that, according to the press releases, the property is an operational mine is an added plus.

That’s true, but if SUBB are to do anything with it, they’ll need to find a stable source of financing. The latest quarterly report (which covers the period ended August 31, 2013) shows that they are in a world of trouble. Here’s what we mean:

  • current assets: $979
  • current liabilities: $722 thousand
  • no quarterly revenues
  • quarterly net loss: $40 thousand
  • accumulated deficit: $11.2 million

Time will tell if they will manage to secure some funding for their operations, but while you’re waiting to see if they’ll succeed, you might want to consider one more thing.

SUBB_logo.pngThe latest statement informs us that during the reported period, the holders of some convertible debentures elected to turn $1,500 thousand worth of debt into 15,000,000 common shares. That brings the conversion price to $0.0001 per share and presents a massive profit opportunity for the debenture holders. Will they take advantage of it? You need to decide for yourself.

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