Penny Stock Dream or Scam: Guinness Exploration Inc (OTC:GNXP)
However after doing a little digging, Guinness Exploration Inc. gives off a number of warning signs including "pump and dump" tactics which is well documented in this post.
Guinness Exploration Inc (OTC:GNXP)
Guinness Exploration, Inc. (Guinness) is an exploration-stage company. As of May 31, 2009 (fiscal 2009), the Company is pursuing merger and acquisition opportunities regarding other mineral exploration projects. During the fiscal year ended May 31, 2006 (fiscal 2006), the Company purchased a uranium property in Saskatchewan, Canada.
During the fiscal year ended May 31, 2008 (fiscal 2008), the Company abandoned the project. Visit the company website at http://www.guinnessexploration.com/
(MicrocapSpeculator.net) With over 131 million shares outstanding, GNXP had a market cap exceeding $135M at the time. Guinness Exploration picked up its main asset, a 65% interest in two Yukon properties, last November for a little more than $1M plus a huge block of restricted stock (60M shares). Surely if the mineral claims were truly valuable, the owner would not have given them away for a smidgeon of cash and a block of shares in a shell corporation.
That’s not all that should worry GNXP
Red Flag #1: The pump-and-dump. According to reports on Seeking Alpha and Silicon Investor, the shady “Elite Stock Report” by Colin McCabe has been pumping Guinness Exploration using paid mailers and emails, in exchange for a $400,000 fee paid by Emma Marketing Services. On Seeking Alpha, Brad Zigler explains:
Catching up with McCabe's not easy, though. The Elite Stock Report's issued out of the well-known financial capital of Fargo, N.D. Specifically, it's headquartered at 3120 25th Street South—you know, in the strip mall right behind the Arby's.
Oh, wait, that's the UPS Store! Yup, indeed it is. Box 347.
Fear not, though. There's a subscription discount card enclosed that points me to Elite's "order processing center" in Sumas, Wash.
Sumas? Never heard of Sumas? It's a town of less than a thousand souls that hugs the Canadian-U.S. border. And the order processing center? Well, it's not behind the Arby's, since Sumas doesn't have an Arby's. It does, however, have a Letterlock mailing service office. And that's Elite's order processing center. Through offices on either side of the border (Letterlock's other office is in Abbotsford, British Columbia), the mailing service offers Canadian post boxes to U.S. customers and U.S. post boxes to Canadians.
Are you starting to see the picture here? There's a pipeline for money to flow from the U.S. to Canada. Guinness Exploration is a Canadian company that just raised $1.5 million to fund the initial phase of the exploration project touted by McCabe. Some $350,000 was paid to Elite Stock Report's publisher to "enhance the public's awareness of Guinness Exploration and its securities." I'll leave it to you to connect the dots.
Here’s a picture of the flyer packed with outrageous claims:
And what about Emma Marketing Services? According to the Vancouver
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