MMEX Resources Corp (OTCMKTS:MMEX) is an interesting company to say the least. They have very big projects planned, especially their $450M proposed refinery, which has the capacity to pump out 50,000 barrels per day. They have already executed the 500 acres land in Pecos County, Texas for the site of the refinery, strategically located near suppliers of shale and distributors to the United States, Mexico and Latin America. They have been hyping their stock since day one with press releases, strategic meetings with government officials and the hiring and retaining of public relations, engineering and consultancy firms.
MMEX Resources Corp (OTCMKTS:MMEX) started this barrage of news releases when they announced their partnership with KP Engineering. Jack W. Hanks, president and chief executive officer of MMEX Resources, said that:
“Plans for the Pecos County refinery are progressing smoothly and rapidly, and the selection of KPE as the project’s EPC contractor is an essential first step to beginning the project. With their strong industry experience, knowledge of the Texas market, scalability and agility, KPE is an ideal partner for MMEX on this project.”
The next news release was on April 19, 2017. Again, Jack W. Hanksregarding their strategic relationship with Trinity Consultants Inc., commented:
“Plans for the Pecos County refinery are continuing to move forward quickly. Our agreement with Trinity, a world class group of environmental consultants who will be vital to securing the necessary permitting for the project, is the next logical step in this endeavor and we are thrilled to have them onboard our growing team.”
On the other hand, their quarterly report for January 31, 2017 shows them having cash balance of $82. Yes, you read that right. They have currently $0 assets and reported cash of 82 dollars, not thousands and definitely not millions. They have no existing facilities built yet. Now the most important issue is the question of capital. Their answer would be to issue more common shares and preferred shares, specifically 3,000,000,000 for common shares and 10,000,000 for preferred shares.
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Construction is slated to begin in early 2018, following the permitting process, and the facility is projected to begin operations in 2019. And all this time, all that we can hear from them are news coverage for this company hiring more and more consultants.
In a nutshell, MMEX wants the investors to finance their $450mn state of the art refinery. According to MMEX, they are :
“…a development stage company focusing on the acquisition, development and financing of oil, gas, refining and infrastructure projects in Texas and South America.”
Upon our analysis, financially MMEX is pre-revenue(!) company with no historical basis to take credit for. What they do claim to have are the competencies of the management. Their first project as MMEX would be a risky $450mn refinery and they want the investors to shoulder the entire financial burden. This does raise a red flag and sounds very fishy to those who will appraise this company in purely fundamental view.
After our digging up MMEX, what we can found amidst all the mountains of reports is this: MMEX is a purely speculative play.
There are no revenues in the foreseeable future and the fundamental success of this company is contingent to whether or not they can raise the $450 million budget for their proposed factory. They have incurred only expenses at this time.
In spite of all these lacks in fundamentals, the stock has performed remarkably well. From its opening price of .0008 on 11/8/16, the stock has peaked at .0532 on 4/3/17. It had a 15.79% increase just from 5/18/17 to 5/19/17, closing on .0117 just for this trading day alone.
The bottom line here is that many traders are now putting their positions for this stock on hold. Bollinger Bands are starting to tighten and volume, while present, is declining. RSI is at 44.76 and stock should be on accumulation stage. Again, fundamentally this company should not be valued at that much but in a technical standpoint this stock is an interesting speculative play. The stock is dancing around the support range of .008 to .009 and we should be on wait and see mode for MMEX. We will continue to update this story as events unfold. For continuing coverage on shares of $MMEX stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!