Applied Minerals, Inc. (OTC:AMNL) Reaches the Limit of Excitement
28 Oct 2010

The gradual but stable decline of Applied Minerals, Inc. (OTC:AMNL) seems paused for now, though the share price has already reached its upper limit of excitement on the announcement of the newly secured funds.

The company announced last Thursday afternoon that it has reached a commitment to issue convertible notes and raise $3,050,000 million in cash. Following the news, in the four following trading sessions AMNL share price added a total of 8.67%, but closed always at the same level: 0.75 for a share. The total volume traded has increased, though it looks like most of the trades have been made in larger transactions, implying that the buyers are yet not so many.

AMNL has maybe just not received the high publicity that some stock promoters would provide, but as the company has currently nothing else to offer apart from the cash and some optimistic CEO statements, the publicity is maybe not deserved either. Moreover, there are still no SEC filings to confirm the deal and it may remain just a promise.

According to the CEO, the proceeds should be used to develop the Dragon Mine property, which is currently the only asset that the company could utilize to produce revenues in the future. In the latest 10-Q, management states that the property contains earth minerals like halloysite, kaolinite and alunite, which find applications in various industries. Though, there is no concrete plan how or when they can be extracted and sold.

On the other hand, it is certain that the dilution risks of AMNL stock will be higher if the funding is actually received. The notes should be convertible into 3,050,000 shares of the company’s common stock.

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