AMLM - the truth exposedDJ IN THE MONEY: American Lithium And The Mystery Stock Promoter
Thursday, November 05, 2009 01:08:00 PM
By Carol S. Remond
A DOW JONES NEWSWIRES COLUMN
Like many development stage companies, American Lithium Minerals Inc. hasnegative working capital, no revenues and little in the form of actualbusiness.
The stock of this Nevada corporation rose to a high of $2.99 last month,spurred by promotional newsletters paid by Lock Partners Inc. Then thecompany's stock price suddenly dived last week in heavy trading volume. Thestock was recently trading at $2.27.
American Lithium came to life in February through a name change andfour-for-one forward stock split. The company, which says it's investigatingprospective lithium opportunities, has so far spent $61,000 to purchase"an option to acquire" mining claims in Nevada. On Thursday, it saidit signed a letter of intent to acquire a lithium project in Utah.
Nobody at American Lithium was available to comment despite repeated phonecalls.
A Vancouver promotional outfit called Rhino Marketing Inc., which was hired byLock to market American Lithium, said Lock might be Swiss, when asked about it.But there's no sign of Lock in the Swiss corporate registry. Disclaimersindicate that Lock paid $300,000 to various outfits to promote American Lithiumstock.
While the people behind American Lithium's stock promotion might want to remainanonymous, there are a few signs that might concern investors.
Two of the men hired to run the company have ties to BG Capital, an investmentgroup based in Barbados. BG Capital has a knack for acquiring big stockpositions in struggling companies on the cheap and securing large fees for itsconsulting services. Deals involving BG Capital tend to be highly dilutive toother shareholders.
Robert "Bobby" Genovese, founder and owner of BG Capital Group Ltdand BG Capital Management Corp., didn't return a phone calls seeking comment.Marco Markin, BG Capital Management's chief executive, also didn't return acall. According to its Website, BG has offices in Nassau, Florida, Los Angeles,Toronto and Vancouver.
Matthew Markin, who according to a Canadian news article is Marco's brother, waspresident of American Lithium from May 2008 to Oct. 2009. He remains aschairman of the board.
Steve Cook, American Lithium's PR guy has worked on BG Capital's two lastturnaround projects, Clearly Canadian Brands Corp. (CCBEF) and SpectrumSciences & Software Holdings Corp., now Horne International Inc. (HNIN).
Matthew Markin nor Cook returned several phone calls seeking comments. MatthewMarkin worked for another BG Capital company, Neptune Society, from April 2002to December 2003. (Marco Markin was president of Neptune Society from October1999 to January 2004.)
Reached on his cell phone Tuesday, Cook said that this reporter's messages hadbeen passed on to Matthew Markin and hung up.
Part 2
Searches of phone records show that the number listed on American Lithium'sfilings with the Securities and Exchange Commission is registered to "BGCapital Man" - which might stand for BG Capital Management.
Cook features preeminently in a 2008 reality show titled Bobby G: AdventureCapitalist. The show's eight episodes show Cook, Genovese and members of histeam hard at work, attempting to turn around Clearly Canadian. The stock ofthis Canadian beverage company climbed to a high of $4.55 in June 2006, about ayear and a half after BG Capital first became involved with the company. Thestock was recently trading at 6 cents a share.
Before Clearly Canadian, BG Capital and related entities were working withbudding engineering company Spectrum Sciences. Spectrum's stock reached a highof $4.02 in April 2004, months after Genovese began controlling a large portionof its shares through dilutive consulting and financing arrangements. Spectrumshares were down to about $1.30 by late May 2004 after the company said the SECwas looking into its dealings with consultants. In November 2005, BG Capitalagreed to pay $3.25 million to settle a lawsuit brought by a Spectrumshareholder seeking to recover short swing profits. That same month, SpectrumSciences said the SEC had concluded its investigation without recommending anyenforcement action. (Spectrum Sciences and Genovese were featured in several InThe Money columns in 2004).
According to filings with the SEC, Matthew Markin owns 22 million shares ofAmerican Lithium's 49 million shares outstanding at the end of July.
The company said it raised $1.45 million in two private placements in July andOctober to foreign investors. According to a filing, the July $450,000placement was purchased by Seaplane Ventures Inc. The document didn't indicatewhere that entity is registered or who controls it.
(Carol S. Remond, a special writer on the In The Money team, is anaward-winning columnist who won a Gerald Loeb Award in 2005 for best newsservice content with "Exposing Small-Cap fraud," a series of articlesthat described how three small companies unscrupulously pumped up their stocks.She can be reached at 303-997-5783 or by e-mail: carol.remond@dowjones.com)