Is There a Mother Lode in These Small Cap Mining Stocks? BRZG & TRLR

Small cap mining stocks Brazil Gold Corp (OTCMKTS: BRZG) and Trulan Resources (OTCMKTS: TRLR) were either active on the charts last week (in the case of the former) or recently the subject of paid promotions (in the case of the latter). However, mining is not exactly an easy business for a small and usually undercapitalized small cap mining stock given the amount it can cost to get a mine up and running. On the other hand, they could always be sitting on the next mother lode just waiting to come out of the ground. With that in mind, here is a quick reality check about these two small cap mining stocks:

Brazil Gold Corp (OTCMKTS: BRZG) Recently Announced a New Deal

Small cap Brazil Gold Corp owns a portfolio of road accessible, grass-roots to advance stage (São Jorge) gold projects in the Tapajós region of northern Brazil. On Friday, Brazil Gold Corp fell 7.14% to $0.0013 for a market cap of 154,427 plus BRZG is down 93.5% over the past year and down 99.3% since January 2011 according to Google Finance.

What's the Catch With Brazil Gold Corp? According to various disclosures, no transactions have occurred to mention Brazil Gold Corp in various investment newsletters. At the end of July, Brazil Gold Corp announced that it had acquired 20% of FAL Minerals LLC, a gold mining and exploration company. Under the deal, Brazil Gold Corp will receive 15% of all royalty payments received by FAL Minerals in connection to a Mineral Lease Agreement for the exploration, production, ownership, possession and transportation of discovered minerals on approximately 17 acres of land in Alabama. According to the Form 8-K, the purchase price for the Interests is $100,000, payable in twelve equal installments of $8,333 commencing August 1, 2013. However, Brazil Gold Corp has reported zero revenues; a net loss $502k (most recent reported quarter), net income of $124k, a net loss of $155k and net income of $11k; and no cash to cover $708k in current liabilities at the end of last March. So right now, its hard to see how Brazil Gold Corp is going to pay for the acquisition without diluting shareholders.

Trulan Resources (OTCMKTS: TRLR) Has Posted a Project Update

Small cap Trulan Resources is a Nevada based exploration and mining development company with a focus on gold, silver and platinum group metals (PGM) projects in North and South America. On Friday, Trulan Resources closed at $0.0055 for a market cap of $3,200 plus TRLR is up 243.7% over the past year and down 98.4% over the past five years according to Google Finance.

What's the Catch With Trulan Resources? According to various disclosures, transactions of $2k, $3k and $7k have or will occur to mention Trulan Resources in various investment newsletters. Last Tuesday, Trulan Resources posted an update about its IGP Iron-Gold-Platinum Project in Chile. It was noted that Trulan Resources had acquired a 100% interest in the iron-gold-platinum project last February and will be responsible for taking it to the next stage of development (including funding all further costs from additional exploration activities, permitting, environmental impact studies, engineering, metallurgy and site development to the construction, set up and initiation of mining and processing operations). A quick look at Trulan Resources' financials reveals revenues of zero (most recently reported quarter), zero, negative $1,405k and $1,396k along with a net losses of $59k and $67k, net income $110k and a net loss of $74k. At the end of June, Trulan Resources had no cash to cover $35k in current liabilities and $213k in other liabilities; but there was a March press release about a loan agreement with a private investment group for the provision of $1,000,000 at an annual interest rate of 6% – meaning investors might want to keep an eye on the company for progress on the project.