LI3 Energy, Inc (OTC:LIEG) hit the heavy gain at once. Yesterday, the stock price jumped up over 35% and its traded volume 
exceeded 2 million shares for the day. Now everyone wonders if the climb will continue.
Historical records show that the most recent news by American Lithium came up a couple of days ago. Then the company reported it was finalizing a one-week extension to its agreement to acquire 60% ownership of the six companies that own the Maricunga Project, set to expire on April 26 this year.
This announcement was a follow-up to the March news that Li3 Energy had signed a binding agreement with the stockholders of six private companies to acquire 60% ownership of these companies. According to the announcement, Li3 will issue additional shares upon exercise of any options and warrants outstanding at the time of the agreement closing in proportion to the sellers’ percentage ownership as of the closing.
Apparently, the press releases inspired investors and LIEG finally grabbed the up move, while traders are still waiting for the company to finalize the agreement.
At the same time, traders’ discussion on investorshub.com message board was fueled up by new revelations. The investors pointed out that Li3 has authorized only $75,000.000 shares by now and kept expecting more news from the company, as well as its technical report with the TSX Venture Exchange by end-July this year.
Li3 Energy, Inc. is an early stage company pursuing a business strategy in the lithium mining and energy sector with an initial focus on acquiring opportunities in Peru, Argentina and Chile and the US. Last year, the company used to trade at over $1.00 per share, however, presently its stock price is 50% lower. In the meantime, Li3 has been regularly issuing shares of its common stock and filing material agreements for ownership interest.[BANNER]
However, according to its 10-Q report the company’s liabilities are about 10 times higher than its total assets and the stockholders’ deficit is over $11 million. As of end-December, 2010 the deficit accumulated during the exploration stage has reached $23 million, while the revenues keep missing.
Based on these results, the management claims that the company’s continuation is doubtful and its future existence is dependent on plenty of factors that cannot be guaranteed. In that case, what will the acquisition of new properties lead to?
