The last time any news updates came out about Hondo Minerals Corp. (HMNC), it was August 21 and Dr. Dick had reports on their Tennessee Mine operations. The Dr. Dick Wullaert report came out the day after the penny stock hit its 52 week low of 0.11 highlighting the mining site, operation and the process flow to produce precious metals. Had you only read what one of their insider’s read, you would be laughing as HMNC stock had its 2nd highest volume trading session of the year today and has gained 127% since the report release.
Hondo Minerals was trading above $2 at the start of 2012. With the insider buying frenzy and the recent rebound, make sure to have HMNC stock on your list of penny stocks to watch. Owning it less than an insider is usually an inside track to potential gains.
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HMNC Stock Chart
Market Cap: 16.75M
Close: 0.249, up 0.049 (24.50%)
Dollar Volume: $139,848
Average Trade Size: 10,115
Issued and Outstanding: 73,481,790
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On June 15th, Hondo Minerals reported their 10-Q for the three months ended April 30, 2012. Since the end of the Company’s Q1, Stephen Michael Grosberg, a 10% owner of the Company, has been gobbling up shares having added 1,049,251 shares to his holdings since May 1, 2012. (see here) Anytime an insider is aggressively buying shares of the company’s stock, something big usually comes from it.
Dr. Dick’s report could be one catalyst that investor’s looked into, but the real meat and potatoes stems from their Q1 10-Q. Although they haven’t banked a penny yet in revenues, the Company increased their PPE, Property, Plant and Equipment, to $13,090,260 for the period ended April 30, 2012 versus $8,071,112 for the period ended July 31, 2011. The main bulk of that increase came in Mining equipment ($6,151,081 versus $4,129,601) and Plant and buildings ($4,110,113 versus $1,539,387). These are not numbers that a typical pump would invest heavily into unless something was underway.
Sure, during the nine months ended April 30, 2012 Hondo sold 4.14 million shares at $.50 per unit, $2.07 million, but each of those units are a) at double the price where HMNC stock is now, and b) each unit consists of one share of common stock at a par value of $.001, a warrant to purchase one share of common stock at $2.00 per share, and a warrant to purchase one share of common stock at $3.00 per share.
Furthermore, On April 18, 2012, Hondo settled a litigation claim by Ironridge Global IV, Ltd. for settlement of the Accounts Payable which had been purchased by Ironridge from certain creditors. Hondo and Ironridge agrered to settle on the $1,648,554.39 payable in shares of Hondo Minerals, roughly 8.9 million shares at a cost basis of $0.1852. The last shares issued in full release and settlement of this claim occurred on June 7, 2012, making this suit completely resolved.
At 0.25 and with litigation behind them, HMNC looks like a solid deal for the trader for an appetite for risk.
About HMNC Stock
Hondo Minerals Corp. is focused on acquiring mines, mining claims and mining real estate in the U.S., Canada and Mexico that contain mineral reserves of precious metals or non-ferrous metals. The Company owns the Tennessee and Schuylkill Mines in Chloride, Arizona as well as other mining claims in the U.S. Southwest. The Tennessee Mine operated from the late 1800’s until 1947 producing lead, zinc, gold and silver.
Bottom Line: HMNC could be a great penny stock to watch if you see the value of insider purchases and increases in mining equipment of a sing of things to come. Is HMNC stock risk free because an insider bought over a million shares in the last 4 months? That’s a clown question.
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