Are shares of Lithium X Energy "Jumping the Shark"? (LIX.V - LIXXF)

For those unfamiliar with the term "Jumping The Shark" it comes from a TV show called "Happy Days" that aired between 1974 and 1984.  Even if you're under 40 you've probably at least heard of it.

The most popular character on the show was 'The Fonz', a tough guy mechanic with a soft heart and a way with the ladies.  All he had to do was snap his fingers and girls came running.  When he wanted to play a song on the Juke Box he just gave it a rap with a closed fist.  Here's a YouTube video which shows why Fonzie was so cool:

Happy Days was a top rated show.  The most watched episode involved the Fonz jumping garbage cans with his motorcycle.  Nothing lasts forever and after a few seasons ratings started falling.  So the producers decided to try the same ploy again, but instead of jumping garbage cans with his motorcycle, this time Fonzie jumped a shark on waterskis while on vacation in California.

While the show got a temporary boost it didn't last.  Ratings continued falling and the show was eventually cancelled.  And from that time forward the term "Jumping The Shark" has come to signify a last ditch effort that ultimately fails.

So why do I ask if Lithium X Energy is "Jumping The Shark"?

I have started getting email blasts from "The Outsider Club" that are touting an investment in Lithium X (LIX.V or LIXXF OTC).  The author is Nick Hodge and here's what it says about Lithium X at the end of the latest email:  

• It’s gone up several thousand percent in the past six months. And I think it can do it again. It’s putting a project into production in South America, owns the largest lithium land package in Nevada, and has the best management and board I can find in the space.
• It also still trades with a tiny market cap of $100 million.
• If you’d like to see my full report on the lithium sector, what to avoid, and all the details on my tiny top pick… just click this link.
• Call it like you see it,                                                                                                                Nick Hodge

Call it like I see it?  Okay....I will.

Firstly LIX is not up several thousand percent in the past 6 months, that's a falsehood right off the bat Mr. Hodge.  Lithium X put out a PR announcing the commencement of trading of LIX on the Canadian Venture Exchange on November 30th 2015.  The stock initially raised at 15 cents and opened at double that, 30 cents.

For those lucky enough to get in on the initial 15 cent raise that equals an eye popping gain of over 1,300% by my calculations...That's incredible, so why overstate things? It did not go up "several thousand percent"???   Right off the bat that might be enough to send potential investors running if Mr. Hodge's email is their first introduction to this company.  Who would listen to a guy so lacking in basic math skills.

And secondly, while its great to say it could go up several percent more....responsible market professionals do not ignore the risks, and the fact is that LIX investors buying at current levels could also lose some or all of their investment.  I'm not saying LIX will fall signficcantly, merely that it could.

Then there's the bit about putting a project "into production" in South America.  Uhm, not exactly. As per a Press Release put out by the company on July 20th, the company doesn't even have construction permits for pilot ponding facilities.  In fact investors are still waiting for an updated resource estimate on that proposed mine.  Production, if it comes, is still years away.

I don't want to go on too much about email blasting stock promotional outfits, they are what they are. If you're sufficiently intrigued you can research this Outsider Group outfit yourself and see if you can find some penny stock they promoted that actually went on to deliver long term shareholder value....If you do leave a comment, I haven't been able to find one yet.  

That's not to say companies promoted by Outsider Club haven't gone on wild rides.

Stellar Biotechnologies is probably as good an example as any of the penny stocks this Outsider Group has promoted.  SBOT saw its PPS pumped up to a split adjusted (a 1:10 consolidation)  $20+ per share from just $2 - $5 and now its back down under $3....that's 20-50 cents pumped to $2+ adjusting for the reverse split.

Besides, there are other promotional efforts being employed to attract investors to risk money on LIX.V or LIXXF OTC.  Oilprice.com is also playing up the Tesla angle, suggesting that the nascent electric car company is scrambling to lock up as much of the Lithium supply as possible.

Whether its oilprice.com or outsiderclub or any other promotional outfit I strongly suggest reading the disclaimer statements, usually there's a link at the very bottom of the web page.

Now regular readers (the huge multitude of devoted Avoid The Bag fans, both of them) know that I view some promotion as being part and parcel of development stage companies, it comes with the territory.  Cash strapped prospective businesses need to raise capital to execute a business plan. There are a number of options of course, they can raise money privately, attempt to secure bank loans or seek out so called "Angel Investors".

And then of course there's the public markets, and it can be hard for a small company long on dreams but short on capital to get noticed.  So some promotion is to be expected.  

So do I think Lithium X is "jumping the shark"?  I do.

Beyond the promotional effort and email blasting Lithium X is also popping up on Google Ads on a lot of sites I visit.  I assume its because of all the searching for stories on both investing and Lithium that I do. The ads take you Lithium X's website and a recent Press Release. 

For me its that old line about a market needing buyers and sellers  The stock market is ultimately a zero sum game, buyers get shares and sellers get cash.  When I see a lot of activity designed to entice people to buy shares I have to ask myself who the sellers are....and if maybe they're the smart ones.

Call it the canary in the coal mine, or the shoeshine boy analogy.  When I start seeing a stock getting promoted and profiled almost EVERYWHERE....my Spidey Sense starts tingling.  JFK's father Joe was lucky to get out the stock market before the big crash....When asked about it later he claimed he knew it was time to cash out when a kid shining his shoes started suggesting to buy certain stocks.  

Do note though....I'm using the present tense with the verb "jumping".  I do believe that there is likely some more upside from current levels for shares of Lithium X Energy.  As with the shark jump on Happy Days, there was a ratings boost that came from putting Fonzie on water-skis and sending him through the air with Jaws waiting if he failed.  

It would have been easier to write something like this after waiting to see if LIX.V - LIXXF trades significantly lower in the coming weeks and months.  Then I could have said...."back then, in the summer....that's when shares of Lithium X "jumped" the shark"....but that's boring and too easy. Trying to predict what's coming is more fun.

Ultimately and longer term I think somewhere around $2.50 to $3.00 will prove to be a high water mark as dilution in my opinion will play a big part in weighing down the share price. 

Longer term though, based on their properties and management experience....I do actually think they have a chance to make a go of things.  In another two or three years, 2018/2019 if they are able to clear the many hurdles they'll undoubtedly face.....then I think they could bring a working mine or mines into actual production.  In the interim though I expect shares of Lithium X whether traded on the Canadian Venture or in the U.S. OTC....in my opinion its going to be a roller coaster ride. 

And if the company does bring a working mine to production, then I think those who've been buying LIX.V (CDN) for $2+ currently, that they might end up being lucky to just break even.  

Good luck

Lithium Americas - The Gordie Howe of Canadian Junior Lithium stocks?

Gordie Howe was my late great mother's favorite hockey player.  She taught me a song about him when I was a kid:

Gordie Howe is the greatest of them all

He can stand, while all the others fall

And when he skates down ice

He shoots he scores

We love Gordie Howe

Sorry I can't convey the tune here.  I guess I could make a video with me singing it, but given that I can't carry a tune in a suitcase, ugh.  This pathetic and miserable  little blog would lose the few followers its gained if I foisted my singing (sic) talents on here.  

Why am I comparing Lithium Americas with the legendary Gordie Howe?  Its the second line of that tune, "He can stand, while all the others fall".

Over the past few months LAC.TO has been having a nice little run, and is currently trading at $1.10 CDN, the highest price it has ever closed at.  That's just 5 cents from its 52 week high reached interday the past two trading sessions.  

That compares very well to a number of other junior Lithium stocks that climbed higher and faster, but that have since fallen back (or down). 

• Lithium X Energy (LIX.V) went to $2.85 in April and has fallen back to $1.70 now.
• Nemaska Lithium (NMX.V) reached a high of $1.97 in May of this year but now sits at $1.29
• Pure Energy (PE.V)  up to $1.15 in April now at .69 cents
• Dajin Resources (DJI.V) 30 cents in April 19 cents now

So why has LAC continued to uptrend while all the other juniors mentioned have pulled back?  

I think the mostly likely culprit is dilution.  

LAC has 295,311,916 shares listed as outstanding as of June 15th. There has been some dilution, but not very much.  In March there were 291,974,008 shares.  The increase to 295,311,916 amounts to 3,337,908 more shares or an increase of just 1.1%

Nemaska by contrast showed 206,715,385 listed as outstanding in March 2016, and now that number has climbed to 236,137,873 for an increase of 29,422,488 shares.  That's an increase of over 14%, or about 1,400% more dilution than what LAC has undergone.  And Nemaska recently announced a proposed offering of between 43,480,000 and 52,174,000 more shares priced at $1.15 expected on July 8th of this year.

It should be noted that, concurrent with this share offering Nemaska has received tentative approval for an uplisting to the TSX, and I do think that will help in attracting investors, possibly even institutions which tend to shy away from the riskier Venture exchange.  

Lithium Energy has seen even greater dilution in percentage terms.  As of March 15th the company had 43,820,732 shares outstanding.  The most recent number, current up to June 15th is 60,538,202 an increase of over 16.7 million or 38%.  

Pure Energy, however, has not seen any dilution over this period, staying at the same 66,2 million from March until the most recently available update to June 15th, so obviously the drop in PE.V is not attributable to the printing of more shares.  Perhaps if some Pure Energy shareholders are reading this they can comment.

Dajin Resources though conforms to the dilution narrative having gone from 118.4 million shares in March to 130.9 currently for an increase of about 10.5% 

There is one notable difference between LAC as compared to NMX, LIX, PE and DJI.  The latter four companies all trade on Canada's Venture exchange while LAC trades on the more regulated big board TSX.  It appears that with NMX joining LAC on Canada's big board exchange, they'll be going from the AHL to the NHL, in keeping with the hockey metaphor.

Here's hoping LAC continues climbing, skating down the ice and scoring for shareholders.  

I should note, there is one Canadian listed Lithium mining company that hasn't pulled back, Orocobre, (ORL.TO).  However unlike LAC and the others mentioned above ORL has actually begun production so I don't consider it a "junior" The PPS sits at $4.75, just off its highest ever close of $4.79 on June 23rd, and its 52 week high (achieved interday on July 4 2016) of $4.87.  

Full disclosure:  I currently own shares in Lithium Americas, hence my opinions are not without bias. I have no position, long or short, in any of the other companies mentioned.  Do note that I do expect to sell some or all of my LAC holdings at some point.  

Speculative stocks like LAC and the others mentioned here comport significant risks.  Everyone has different tolerances for risk and different investment objectives.  The bottom line is to sell for more than what you paid, nobody ever went broke taking profits.  

The comment field is always open, but it is moderated....comments that are abusive, contain blatant pumping or bashing, won't be approved.  Pumping and bashing include statements of opinion expressed as fact, such as "Gonna go much higher" or "Look out below".

Can Lithium Americas break through the $1 CDN barrier?

Full disclosure right up front.

I have what I consider to be a significant position in Lithium Americas, traded in Canada on the TSX under the symbol LAC.  In the U.S. the stock symbol is LACDF and trades OTC Foreign.  I have not been compensated for writing this, (or any other) blog entry.  In point of fact I have not and will not accept payment to express an opinion on any stock, either bullish or bearish.

Also it is my full intention to sell my shares of LAC at some point.  And spoiler alert, I do think LAC will break through the $1 CDN barrier.  When I sell I do intend to write a blog post explaining my reasons, however in all probability it will be after the fact.  And if past history is any judge I tend to get out too soon, meaning those buying my shares have had the chance at gains themselves. Nemaska is a prime example.  

Bottom line, nobody ever went broke taking profits, and that axiom is doubly important with speculative stocks like LAC/LACDF from my perspective.

So why do I think the market will support a price of greater than $1 CDN for LAC?  Admittedly its not a big stretch at this point, with LAC sitting at .99 cents on the TSX as I write this.  Since April this is LAC's third kick at the one dollar can as evidenced by the chart below.

I wrote my first blog entry about LAC here at Avoid The Bag on April 27th, Before that I'd shared my opinions on Seeking Alpha.  Seeking Alpha Instablog.  April 27th ATB Blog Post  

In that April 27th ATB entry I offered up the opinion that LAC was seeing the formation of a Cup & Handle chart pattern, the stock was trading at 75 cents and I offered up the view that I could see it dropping as low as 65 cents (it got to 66) before rebounding and heading back to a dollar and beyond.

Well its pretty much made it back to the dollar mark, and I do think it will go beyond....and of course I will explain the rationale behind my opinions.  You can then decide if you consider my opinions rationale or not for yourself.

All my regular readers (all three of them) know that I'm not big on fundamentals.  I consider fundamental data to be any and all information available in the public sphere, and as such it is all dated.  Even if a company announces a merger or acquisition (as happened when LAC and Western Lithium merged), by the time the news hits I consider it already priced in.  Others might pump synergies and economies of scale, but not me.

There are however, events that I believe could serve as catalysts in the future.  

Lithium Americas has a corporate slide presentation available on line that is dated March 2016. (VIEW THE SLIDE PRESENTATION HERE).

In that old slide presentation the company cites a Feasibility Study (FS) done in July of 2012, obviously very old info, soon to be four years old.  In that presentation it cites the price used for Lithium Carbonate in its projections as being $5,500 p/tonne.  

I like conservative estimates, its better to under promise and over deliver.  But while $5,500 p/tonne might have been a reasonable number a few years ago, the explosion in Li prices I believe warrants an upward revision.  When Nemaska announced its updated FS in early April of this year it sent that company's share price sky rocketing from around 70 cents CDN up near $2.  Nemaska revised their Li Carbonate price upward from $5,000 to $7,000 p/tonne.

Then there's the elephant in the room, Tesla.  They will be having their battery Giga Factory grand opening on July 29th.  As the date gets closer I think a lot of Lithium Mining companies, both Juniors and Incumbents, will see their share prices boosted as a bright light shines on the entire sector.  Its the old:  "A rising tide lifts all boats" line of thinking.

And don't forget that Lithium America's recently brought David Deak on board as a Sr VP and CTO. Mr. Deak had spent his previous two years working for Tesla as a Senior Development Engineer according to his Linked-In Profile.  I am not suggesting that anything is in the works between LAC and Tesla, but I do consider it a possibility.

It is for these reasons, in combination with the chart, that I very much like the chances for LAC to bust through that $1 barrier and to make significant gains.  

But please take note....there is no such thing as a slam dunk in the public markets and in my opinion LAC still comports significant risks.  Everyone has different tolerances for risk, and different time horizons.  Stocks can be dangerous, and people do get hurt buying into hype and excitement and the risks here are very real.  

Ultimately any money made or lost, the person to be congratulated or angry with is the one that looks back in the mirror.  The comment field here is open, and while it is moderated, all I ask is that the tone be respectful with no brainless "lots of upside here" pumping or "get out now" bashing.  

Will Nemaska rebound?

I first started writing about Nemaska last year over on Seeking Alpha where I post under the same user name that I employ here, Joe Retail.  That was back when NMX was trading for about 15 cents on Canada's Venture exchange.  

http://seekingalpha.com/instablog/15663412-joe_retail/3902216-lithium-americas-and-nemaska-charts-and-insider-buying-have-me-bullish

I rode it for more than a 600% gain, but ultimately left a lot of upside on the table, exiting well before it hit its all time high up near $2 CDN.  That's okay, even when I wrote about getting off the Nemaska train I acknowledged that I was likely leaving too soon, that there was in all likelihood more upside.  I shared that with another SA blog post on April 21st, which was just before I started publishing my own blog here at Avoid The Bag.

http://seekingalpha.com/instablog/15663412-joe_retail/4875517-got-nemaska-train-yesterday

I admitted liking Nemaska even when I was selling, and in fact I still do....from a fundamental perspective.  I know, I can just hear both of my regular readers saying:

''FUNDAMENTALS'!?!?!  

''You're always writing that the fundamentals are already priced in, that's its old information that barely registers when you're making trading/investing decisions''.

And that is true, and ultimately its why I sold.  The lane that Nemaska was riding in on the investment freeway started going too fast for my liking, things were so good that everyone was moving in and I figured it was due for a correction....my timing could have been a lot better, but as I write so often, better to get out too soon than too late.

What do I like about Nemaska?  I have a patriotic streak to me, and I lived four years in la belle province de Québec, et franchement, Québec me manque.  Oooops, sorry.....latent French slipping out from my time living in French Canada.  I share the opinion that lithium is going to be hugely important, and a mine not only in Canada but also in my favorite province of Quebec, that's beyond awesome.

But as I've also written a few times before, a lesson from my late great father was not to fall in love with a speculative stock.  And with Nemaska not projecting an operating mine until 2018, there's still a lot of speculation left with Nemaska.  Everything so far has gone smoothly, but they're not yet in production.  As they get closer to to an actual working mine, a few snags and road blocks are probably to be expected.

Another concern is dilution.  Back in 2015 when I first bought in the number of issued and outstanding shares was around 190 million.  As of May 31st of this year that number had increased significantly, by about 45 million.  That's an increase of almost 25% to over 235 million.  

Also there's a chart you can find on line, several actually, which show the life cycle of a mine from start up to production.  The chart shows a rise, a fall and then another rise, with a trough in between. If Nemaska follows the pattern it should start on an marked uptrend sometime prior to full production in another two years or so. 

I don't think this chart pattern is one size fits all, but as a general guide I believe it can be useful. I would share it with you but I don't want to infringe on any copy written material.  You can google image search it and look at a few examples if you wish.

Nemaska, thanks to promotional efforts with Ellis Martin, The Midas Report, the Vegas Lithium investor show, and probably one or two others that I'm missing, it has had one helluva run.  And even though I am out right now I still check it from time to time.  The trough that the life cycle chart shows is the period when the hard work of building the mine is carried out, before it goes into actual production.  

We shall see how it plays out over the next couple of years.  In the meantime I'll keep looking for slow moving lanes on the investment speedway that look like they may start moving in the future.  

Lithium Americas (LAC.TO / LACDF) Added to Global X Lithium ETF (LIT)

As far as I am aware there is only one ETF (Exchange Traded Fund) that focuses solely on Lithium, and that is the Global X Lithium ETF which trades under the symbol LIT on the NYSE.

If you go to the Fund's website you'll see a listing of the Top 10 Holdings, and up to the right of the list you will see an arrow and the words: FULL HOLDINGS (.CSV) all in orange lettering.

Click on that and it provides a full list in word format, here is the list cut and pasted:

"Global X Lithium ETF",,,,
"Fund Holdings Data as of 05/05/2016",,,,
"% of Net Assets",Name,"Market Price ($)","Shares Held","Market Value ($)"
21.619,"FMC CORP",47.54,"259,956.00","12,358,308.24"
9.674,"QUIMICA Y MINERA CHIL-SP",21.06,"262,591.00","5,530,166.46"
5.955,"OROCOBRE LTD",2.53,"1,344,297.00","3,404,198.75"
5.430,"ALBEMARLE CORP",67.10,"46,258.00","3,103,911.80"
4.490,"SAMSUNG SDI CO LTD",100.05,"25,651.00","2,566,433.21"
4.131,"LG CHEM LTD",249.91,"9,450.00","2,361,681.39"
4.123,"GALAXY RESOURCES LTD",0.28,"8,528,272.00","2,357,125.73"
4.052,"GS YUASA CORP",4.08,"567,894.00","2,316,100.12"
3.945,"SIMPLO TECHNOLOGY CO LTD",3.38,"666,700.00","2,255,356.98"
3.942,"TESLA MOTORS INC",211.53,"10,652.00","2,253,217.56"
3.928,"JOHNSON CONTROLS INC",40.50,"55,441.00","2,245,360.50"
3.878,"BYD COMPANY (144A)",5.66,"392,000.00","2,216,814.70"
3.771,"SAFT GROUPE SA",30.61,"70,432.00","2,155,762.11"
3.520,"FDG ELECTRIC VEHICLES LTD",0.06,"34,711,800.00","2,012,187.53"
3.319,"PANASONIC CORP",8.58,"221,220.00","1,897,348.50"
3.276,"DYNAPACK INTERNATIONAL TE",1.49,"1,256,300.00","1,872,670.61"
2.153,"ADVANCED LITHIUM ELECTROC",1.06,"1,158,129.00","1,230,796.06"
1.989,"LITHIUM AMERICAS CORP",0.54,"2,118,067.00","1,136,885.44" *
1.494,"VITZROCELL CO LTD",9.66,"88,408.00","853,906.10"
1.492,"CHANGS ASCENDING ENTERPRI",2.29,"373,151.00","853,074.67"
0.883,"BLUE SOLUTIONS",16.23,"31,108.00","504,973.52"
0.845,"BACANORA MINERALS LTD",1.15,"418,958.00","482,789.44"
0.789,"COSLIGHT TECHNOLOGY INTL",0.34,"1,326,973.00","451,278.68"
0.696,"ULTRALIFE CORP",4.09,"97,272.00","397,842.48"
0.384,"CHINA BAK BATTERY INC",2.59,"84,722.00","219,429.98"
0.146,CASH,1.00,"83,930.11","83,728.96"

(* My Bolding)

Lithium America's isn't the only Jr. Lithium Miner included in the fund,  there are two others.

• Bacanora trades in Canada on the Venture Exchange under the symbol BCN.V
• Orocobre trades on Canada's big board TSX under the symbol ORL.TO

And of course the so called "Big 3" of  FMC, SQM and Albemarle Corp are included. They however are not Juniors, but actual producers. Lithium though is just a minor component of each one's overall mining and business operations.

There are so many Jr. Miners out there right now vying for attention in the Lithium space, and I for one am convinced that a lot of them will never develop anything and that they're just looking to ride the wave the way so many penny stock companies tried to cash in on all the Medical Marijuana hype a couple years back.

With LAC.TO, BCN,V and ORL.TO being included in this ETF it suggests to me a level of validation from the market for these three.  

One final note on the overall fund itself LIT.  After languishing for much of the past 2 years it has finally started to climb off the bottom it hit around February of this year.  But even with that positive movement the growth pales in comparison to what's been achieved with some Jr. Lithium mining stocks.  A big reason for that of course is the companies that make up most of the fund....companies, even mining companies, for which Lithium is just one small component of their overall business operations.

I will keep an eye on this fund to see if they add more Jrs, but for now as an owner of Lithium America's shares its good to see that this fund bought in.

Disclosure, as a shareholder in LAC my views and opinions are not without bias.  Also please verify all information provided.  I would never knowingly post something false, however I can make mistakes so verify all information.  

Lessons for Lithium Players in Medical Marijuana Scams

A couple of years ago there was an explosion of companies touting themselves in the Medical Marijuana space as investors stormed in, hopeful of getting rich by investing in Wacky Tabacky stocks.

Those doing the same now with Jr. Lithium miners would do well to learn the lessons taught by some of the scams that came out of the Pot Bubble.  Here is a linked article dealing with charges brought against promoters of a pump and dump scheme involving two companies from last year, PHOT and HEMP, both traded on the OTC market in the US.

SEC Settles Charges in 2014 Marijuana Stock Scam

Of course there are tons of other examples where MJ stocks soared and then tanked that didn't break any laws  As far as I'm aware there are not statutes against taking advantage of stupidity combined with greed.  And with carefully worded news and promotional stories it is possible to spur interest in a stock without running afoul of the law.

In the case of companies promoting themselves as Marijuana plays, news items and toutsheets could herald the liberalization of marijuana laws and talk about the fact that "mary jane" is projected to be a multi billion dollar industry.  It pays to have a firm handle on hyperbole, because at times like these hyperbole runs rampant. 

For those unfamiliar with the word hyperbole, I define it as meaningless words meant to sound meaningful.  Here's an example of how I see hyperbole being used now with Jr. Lithium miners.

• Dewey Cheatham & Howe Minerals is pleased to announce that we have just acquired a claim of over 500 acres in the same area as Existing Lithium Mining.  This claim has the same topographical and geological makeup as that of Existing Lithium Mining and we are excited to have made this acquisition with the aim of advancing our Lithium Mining Project.  CEO I. Cheatham stated: "We firmly believe that with demand for Lithium exploding that we are uniquely positioned to monetize our Lithium Project.  Prices for Lithium have more than doubled in just the past year.  And with Tesla and other EV companies ramping up production the global Lithium market is forecast to be approaching $2 trillion dollars by 2020".  

If you've been following Jr Lithium companies and reading their press releases that might sound just a little familiar.  And there's nothing wrong with it, Lithium spot prices have more than doubled recently, and the global market for Lithium is forecast to be nearly $2 trillion by 2020.  That doesn't mean that this fictional Jr Lithium miner will see even one tenth of one percentage point of it.  But the goal of PRs of this sort is to get potential investors to buy stock.  

What does the overall world Lithium Market have to do with a Jr Miner that doesn't even have a single permit in place?  And that's to say nothing of all the other steps, (environmental assessments, financing, evaluation of provable and probable resources, etc) that need to be taken, steps that take years to complete.

I am confident in predicting that of the dozens of Jr. Lithium miners now popping up, that only a small handful will ever make it to production. So here are some guidelines on what to possibly look for in my opinion.

1. Many of these companies are listed on Canada's Venture Exchange, which has a well earned reputation for being the wild west of the investment world, and a favored listing for poorly capitalized and barely surviving Jr Mining Companies.  Here's an article in Canada's National Post newspaper on over 900 alleged "Zombie Companies".  (LINKED ARTICLE)  Canada's main index is the TMX and is the senior exchange.  If you use yahoo finance a TMX listed stock has .TO after the symbol, Venture listed stocks end with .V
2. Check the share structure to see how many shares are already issued.  Many of these companies have been around for a long time and already have 50 or even 100+ million shares issued and little or zero revenue.
3. Check to see if there are any promotional outfits hyping them and read the disclaimers, Youtube is a good place to look as many Investor Relationship companies do videos now.
4. Read any PRs and company filings carefully taking particular note of forward looking language like "we expect, anticipate, forecast" etc.

I'm not listing any company names here but here are two linked articles which list a number of Jr. Miners.  The first is from a site called nanalyze that lists 19 Juniors, all with market caps of at least $5 milllion: 19 Lithium Junior Mining Stocks

The second is from a Seeking Alpha writer: The Junior Lithium Miners 

DISCLAIMER

This is strictly an opinion piece, and my opinion could very well turn out to be wrong. This instablog post is intended strictly for informational and entertainment purposes and should not be used as a basis for any investment decisions. Investing in stocks or options involves significant risks. For investment advice you should seek the input of a professional investment advisor.