By Michael Montgomery-Exclusive to
Rare Earth Investing News
Due to the trade policies of China, the rare earth mining sector
has been one the hottest commodity markets over the past year. As
supply is reduced, and prices for the various metals have shot
up, a wave of investment has flowed to many hopeful mining
companies with valid deposits, and reputable management. Most of
these companies are not mining their deposits and have little to
show, apart from resource estimates, that their companies are
worth the investment. It is on the investor to practice due
diligence in researching the company's financial statements, and
the reputation and experience of the management in making wise
investment choices. A guide to researching mining companies from
Chris Berry, founder of House Mountain Partners, was outlined on
Gold Investing News
in April. In the article, Chris Berry outlines the most important
factors for evaluating mining companies with little more than a
deposit as a company asset.
One hopeful rare earth company that has been in the news with
spectacular headlines is
Green Technology Solutions
(PINK:
GTSO
) based out of San Jose, California. Some of the company's
press releases state that the GTSO has partnered with a
Mongolian rare earth
exporter called '
Rare Earth Exporters of Mongolia
' that is looking to develop REE properties in Mongolia. The GTSO
has stated that it is shipping its first wave of rare earth
oxides to
South Korea
. Recently, the company announced it had acquired the rights to a
rare earth deposit in
Arizona
. The company issued a press release today stating the company
has a deal to develop
gold
,
diamond
and rare earth mining properties in the
Democratic Republic of Congo
.
These wonderful sounding press releases almost pulled this
reporter in as well. However, looking at the company's financial
statements and management team has made this GTSO seem less than
appealing, and maybe a scam.
In multiple attempts to interview Green Technology Solutions
CEO John Shearer, he was not able to be reached, nor was any date
of when he would be in the office provided. In another attempt to
speak with the management team the company's own Ms. Dorj
Atantogos, Director of Mongolian Operations, the receptionist at
GTSO, was unaware of the person's affiliation with the
company.
A closer look at the company's 10-K
SEC filing
showed less than promising data for a company with so many eye
popping headlines. First, Green Technology Solutions changed its
name from 'Sunrise Energy' in October of 2010. Sunrise Energy was
"engaged in the exploration and development of oil and gas in the
Ukraine." Shortly after the name change, in November 2010, the
company purchased Bio Pulp Works, a company that makes recycled
paper products.
The company's 'risk factors' under the SEC filing are exactly
the opposite of what Chris Berry has listed as an essential for
investment in mining companies,
management experience
. This is taken from the company's 10-K document.
"The independent auditor's report on our financial statements
contains explanatory language that substantial doubt exists about
our ability to continue as a going concern. The report states
that we depend on raising additional equity to continue our
operations. If we are unable to obtain sufficient financing in
the near term, then we would, in all likelihood… we may be placed
into bankruptcy or undergo liquidation… For the year ended
December 31, 2010, the company's net loss was $715,871 and our
accumulated deficit was $7,799,363… Our management has limited
experience in our proposed areas of operation. It is unlikely
that any of our officers or directors will have any direct
experience in the business of any target company."
The company, as of Dec. 31, 2010 had only $2,613 in the
bank.
The company's only listed employee, management, or board of
directors is CEO John Shearer. According to the statement above,
he has no experience in the rare earth mining industry, and his
main experience is working for investment banking firms. He has
no expertise in overseeing mining operations. Shearer is featured
on a site called
Beijing Bullion
, which shares an IP address with GTSO, on the site there are
links to "BUY GTSO."
Green Technologies Solutions headquarters in San Jose,
California, is a 'virtual office' in which the address listed at
'2880 Zanker Road, Suite 203.' The listing is not as GTSO, but to
a company called HQ Global Workplaces. When pressing those
available for comment at HQ Global, no email address was able to
be given, no physical address for the company was available, nor
was anyone at the company able to give validity to GTSO. They are
simply a phone call center and voicemail service company. Whether
the repeated attempts to speak with CEO John Shearer are ever met
with a response is doubtful at best.
Before buying shares of a company in the rare earth market, or
any market for that matter, practice due diligence to be sure
that the company is valid and worthy of your hard earned money.
Many of the companies in the rare earth space are still in the
early developmental stages, however, can still be good
investments. Just be weary of those with spectacular headlines
and little to show for it.
Good Investment or Scam: Green Technology Solutions
originally posted on
rareearthinvestingnews.com