The financial truth is now out for all to see on the worthless Mkango Resources (LON: MKA). Yesterday the Company released their quarterly report up to 30 June 2016 and as foretold by yours truly their cash position is absolutely dreadful. You’ll note how sneakily the figures were not put directly into yesterdays RNS. One had to go to their site and the awful Canadian Sedar listings to dig out and unravel just where all the cash and liabilities stand. Of course Mkrappo know that most retail investors haven’t got the time or inclination to dig deep into fundamentals and balance sheets. This is why the figures were not put into their RNS.
Once you are able to break through the smoke and mirrors the truth sets you free. In a nutshell the company are basically close to insolvency and would be trading insolvent if all liabilities were due. Accrued liabilities stood at $590,000. Remember this was 10 weeks ago so this figure will rise and has already risen. The cash in hand makes shocking reading. The $1,500,000 IPO cash raise, announced on June 15 2016 has evaporated to $559,440 as of June 30th 2016. So some 10 weeks down the line i.e TODAY, this figure will have decreased and will continue to decrease. My estimate taking into account their current cashburn is that they have circa $400,000 left in the till.
There’s no money for drilling, there’s no money for a bankable feasibility study, there’s no money for a feasibility study or even an environmental impact assessment. Zippo. They can not and never could progress because to all intents and purposes, putting it as nicely as I can Mkango Resources are a Lifestyle company. The rare earth mineral market is and has been on its arse for years. It’s at an all time low. Who is going to pony up the $216,000,000 needed by MKA? Where is it coming from? They were bankrupt after 6 years on the Canadian TSX-V market and they will run true to form on the London AIM. They’re running on fumes. The financial gymnastics used to hide the dire financial position, such as adding in warrants that may never be exercised, can be read in their Management discussion document. HERE. The accumulated loss since incorporation is penned at a whopping $11,930,242. After 6/7 years there’s not been so much as a gram of REE produced from any of the piss poor Malawian licences. Songwe Hill is exactly what it was a thousand years ago. A hill in the jungle.
Those that can be bothered to read and investigate can see just how shameless the corporate hyenas running this junk company are. They’ve cancelled their own share options of fifty Canadian cents and reissued them at five Canadian cents. The reason given? They were ‘Out of the money’ if that doesn’t take the biscuit maybe the sneakily inserted line in Note 9 FINANCIAL INSTRUMENTS (continued)
which reads thus,
“The Company’s operating cash requirements including amounts projected to complete the Company’s existing capital expenditure program are continuously monitored and adjusted as input variables change. As these variables change, liquidity risks may necessitate the Company to conduct equity issuances or obtain project debt financing”
The above may help to focus and nail the current bullshit being spouted from Mkango, ‘Dubious’ Dziubinski of Jub Capital & his recruited pump & dumpers. You can read about them HERE. The above is a notice that gives them carte blanche to place and dilute stock at any time. The no placings/death spirals for 18 months is nonsense? Pure tripe.
In Note 11. CAPITAL MANAGEMENT
We learn this: “It is ‘anticipated’ that the operations of the Company for at least the next 12 months will be funded by cash raised from a placement on AIM, which closed on June 15, 2016 (Note 8(a).”
So as explained many times to the BB morons. There just is no way that this lot will go 18 months without placing. Total bolloxs. As soon as the nomad and corporate advisers call in their $204,771 dollar debt then you’ll get a placing or some kind of death spiral finance. Remember by their own admission they are actively seeking funding right now.
What’s actually going on behind the scenes? Well I’ll tell you a story. Mkrappo are desperate to get the sp to 6.6p in the hope that the ‘gullible’ will exercise their warrants to give another cash infusion to keep the train wreck going for a few more quarters. Of course this may happen or it may not. Expect lots of ramping and little snippets of inside whispers on good deals in the pipeline. All part of the pumping & dumping to fleece the gullible. But one thing is for certain. The one man band bucket shop Jub Capital will have flipped ALL his stock. Rinse repeat, rinse repeat…..
Massively over valued now with debts outstripping cash. Value? On a good day 0.50p. Half a penny in old money.
It’s a pile of shit and don’t forget guys/girls that money is also being fleeced out of your pockets and going to Leo Mining & Exploration Ltd as well as Digby Wells Environmental. Both companies are cross pollinated with Directors from? Yep Mkango Resources. It’s a fleecing of cash from the gullible to the not so gullibile.