Quest Minerals & Mining Corp. (OTCBB: QMNM) has finally bounced back over the past two trading sessions, gaining nearly 153% or $.0026 on volume of more than 78,236,740 shares traded. QMNM.ob closed out Wednesday at $.0043 after hitting its 14 session high of $.0057.

With one-day volume surging 300%, 5-day volume increasing 180%, and 10-day volume up about 82%, trading in the stock is certainly picking up. Despite, average 5 and 10 day closing prices being down considerably (- approx 30% and 67% respectively), Wednesday’s run coupled with a recent surge in volume has me optimistic with regard to what the next few trading sessions have in store for QMNM.ob.

A Burst Through the $.0046 Level Early Thursday Would be Bullish in My Opinion

QMNM.ob broke through the $.0046 level just after 11:00 on Wednesday, the stock ran up to its recent high of $.0057. If QMNM.ob can test and break that level in early trading today with even a fraction of the volume behind it than what we saw driving the mini-run up yesterday, we could see QMNM.ob consolidate in the $.0055 range and possibly move higher if investors are confident that we’ve formed a new base here and aren’t selling off back to $.0045.

Surely, the continued ups and downs in QMNM.ob are due in part to the speculation birthed by a lack of company news. However, I had the chance to speak with the Chief, Eugene today and our conversation definitely left me optimistic with regard to what is going on both at Pond Creek and with the GWENCO BK hearing.
What’s Going on with Quest?

It’s getting late here, but here’s some of the most important nuggets of information from my conversation with Gene today:

1. BK - I don’t have my notes in front of me at the moment, but the gist of it is: GWENCO, has received verbal agreement from the previous contesting debtors and will send out another revised plan in the first week of October. Gene has stated time and time again that this situation is under control and should be completely wrapped up by the end of ‘08. I am working on him to issue a press release on this topic just to keep us all informed and equipped with solid time lines and dates to look out for.

2. Production: Gene continues to state that they are mining coal. He also stated that they have been having problems with their continuous miner (piece of equipment, not one miner) and that when it does go down, which is sporadically, it can take about 4 hrs to fix, ceases mining for the time that its down, and is not the easiest fix in the sense that it is in a hole (the mine) and I would say an overall pain in the ass to deal with.

Solution: Gene mentioned that they would soon be utilizing a second continuous miner which would greatly help the flow of coal because if one miner is down, there is still one running , hence no complete cease in production.

My Beef: Since I can understand Gene not wanting to issue press about equipment being down for hours or shifts here and there and also is not yet prepared to issue tonnage reports, I commented that it’s not fair for either those at the mine or those calling the mine or mining company to have access to info not disclosed in publicly available documents, namely press releases.

Also, as Gene and I agreed, if you call the mine and get a hold of a pissed off employee that has been trying to fix equipment for 6 hrs, you may get told just how horrible things are this week. That may not be completely true in the grand scheme of things which the worker may not be aware of or be expected to be aware of.

Conversely, you could potentially speak to a miner that worked a great shift and is going home to a nice home cooked meal. He may tell you all is good at Pond Creek, but that may not hold true in regards to the big picture. No offense to the miners, they put their lives at risk everyday which is more than a desk jockey like myself can say, but they are most not likely the ones who should be fielding investor calls. Sure, some of them may be master traders, but I bet most of them are far from it.

Either way, I suggested that Gene tell the miners not to answer the phone or field investor calls and my associates ask investors to call the proper personnel for reliable info. I’d just hate to see the stock move in any direction based on what one miner coming out of his 2nd consecutive shift in a dark hole says about the operation in its entirety. Either way, I’m pushing for at least some periodic updates on the status of equipment. Let’s see how that goes.

On another note, Gene did explain that to get closer and closer to the main seam at Pond Creek, their continuous miner has cut through something ridiculous like 20,000 tons of rock. I can understand how that could cause some damage. Either way, with a 2nd miner soon to be in action, things appear to be on the “up and up” at Pond Creek. Moreover, Gene said he’ll likely hold off on a tonnage report until the end of October unless he hits a massive vein here in the very near future.

PENC.ob Breaks Through Resistance, Hits $1.15. Look out Tomorrow!

As I had hoped early on this morning, PENC.ob finally broke through resistance at 1.06 and blasted through the $1.08 – $1.10 range to a closing print of $1.15.

My estimate that it would have taken between 50K to 100K share volume to get there was just about right. PENC.ob traded more than 50K shares today and appreciated significantly from yesterday’s closing price of $.97.

We saw some very bullish momentum in PENC.ob today, with the stock gaining 15% on fairly thin volume. The ask looked firm towards the end of the day at $1.15, so I’m looking for a move higher once trading commences on Thursday. It doesn’t look like too many sellers are present at $1.15. So, I like the chance of PENC.ob reaching $1.20 or higher tomorrow

“PENC.ob Showing Promise For Wednesday Trading. A Move Past $1.05 Would Be A Very Bullish Sign”

While the broader market remains about as volatile as Britney Spears after a 5th of Vodka, QMNM.ob and PENC.ob both posted steady gains are show promise to break through their respective resistance levels on Thursday and provide some very nice gains for even those investors that were scared to turn their screens on in recent mornings in fear that the market had disintegrated. It hasn’t yet folks, so keep checking back.

Quest Minerals & Mining Corp (QMNM.ob) shares continue to drop in early trading and are now down nearly 30% today to $.0017 on volume of more than 15 million shares.

Share price has been depreciating rapidly here as of late and could still go lower with no production updates from the company.

The stock is undoubtedly being adversely impacted by the uncertainty of Quest’s wholly-owned subsidiary, Gwenco Inc’s ongoing bankruptcy proceeding and a lack of a corporate update regarding the company increasing coal production to meet previously outlined goals and/or hitting the main seam at its Pond Creek, KY mine.

In regards to the BK hearing, from what I’ve been told, the company has received a verbal agreement from creditors that previously objection the most recent reorganization plan. I will check with management again on this early this week, but I’m pretty sure that this is the case.

Also, I will inquire about progress at the mine and the possibility of a tonnage report. Check back later today or early tomorrow for an update.

I had the chance to speak with Eugene from Quest Minerals & Mining (OTCBB: QMNM) this morning from the Pond Creek mine in Kentucky.

Although the Gwenco BK proceeding has in fact been delayed another 20 days, he did note that on the bright side, they were able to conduct a private meeting after the judge’s decision and receive a verbal agreement from the objecting parties to accept the revised re-org plan.

The way that I understand the situation, the creditors will be issued a notice during October which will be voted on shortly thereafter during the next, and potential final, proceeding. As I am not a lawyer, and don’t claim to be one, I can’t be positive that this is absolutely the last bump in the road in regards to Gwenco proceeding out of Chap 11. However, Gene seems confident that he has taken a major step towards moving out of BK with the verbal agreement.

Gene also mentioned that he was in fact standing in front of the conveyor belt at Pond Creek and watching coal come out of the mine. He also mentioned that they are about 500 ft from hitting the main seem, but are nonetheless churning out “good coal every day”.

I will report back on my findings pending future conversations with the company. I hope that this helps shed some light on the situation unfolding at Quest. 

Hello all. I did not have the chance today to speak with Eugene at Quest regarding the objections to their re-org plan for BK. However, I’m pretty darn sure that he had to have been aware of them prior to our conversation last week and he was confident that the judge would in fact accept his plan. I plan on contacting him first thing tomorrow morning and will be sure to reply back with my findings. Sorry for the delay folks! Let’s keep our fingers crossed.

Since advancing more than 4,000% on more than 685 million shares traded and hitting a recent high of $.075 during the four days between 6/18 and 6/23, Quest Minerals & Mining Corp. (OTCBB: QMNM) has dipped back into the $.005 range.

Due to the high volume of important corporate developments transpiring over the past few weeks, I felt it prudent to get on the phone with the company’s CEO Eugene Chiaramonte, Jr. this past Friday and get his take on the situation. I’ll touch on that in a moment. But first, let’s take a peek at the what’s been happening at Quest.

In regards to the major events recently transpiring at Quest:

1. The company’s wholly-owned subsidiary Gwenco Inc. recently filed an updated plan for re-organization in accordance with its Chapter 11 bankruptcy proceedings and is awaiting a judge’s decision on 9/16.

In addition to achieving profitable production levels, this has been identified by investors, small and large, as one key driver of current and future stock price. I’ve spoken with many people personally of the firm belief that simply by having its subsidiary proceed out of bankruptcy, Quest would instantly demand a more favorable valuation in the market due to the decreased risk it would create; and

2. Their Pond Creek, KY, coal mine recently re-commenced production after making a number of equipment and infrastructure improvements.

The Quest Guessing Game
Simply put, predicting the stock’s daily performance has proven to be one of the biggest guessing games in recent micro-cap history.

For example: on 6/20 QMNM gained more than 160% on nearly 161 million shares traded on news that the company was rapidly approaching production at its Pond Creek, KY coal mine. On 8/1 Quest officially entered into full-production and raised production goals at the mine. The stock gained only 22% on just 18 million shares.

Quest CEO Optimistic Regarding Re-org Proposal
Per my conversation with Eugene, the CEO seems pretty confident that his reorganization plan will be accepted by the judge this week. However, a bit of digging online reveals that at least one past creditor has objected to the plan proposed by Quest’s wholly-owned subsidiary, Gwenco Inc. Since I did in fact discover the objection subsequent to my conversation with the CEO, unfortunately, I can’t provide his take on it. I will however attempt to reach him on Monday and post my finding on the blog.

In regards to the objection, although I’m not a lawyer, I’d guess that having at least one party object to re-org plans is fairly commonplace for a typical bankruptcy proceeding. Everyone wants their money first and in full and that can’t be a reality for all unfortunately. I guess the judge will have the final say here are well have to wait until Tuesday or Wednesday to learn of the outcome. Let’s keep our fingers crossed!

Pond Creek Mine Improving. Slowly But Surely

According to Thursday’s PR, the mine shipped 35 trailers of coal holding 42 tons apiece to its to its wash plant for processing between 9/8 and 9/9 for an average of 700 raw tons of coal per day. The release goes on to state that the company is getting close to completing a turn which will land them on the full face of the mine’s coal seam. Furthermore, my conversation with Mr. Chiaramonte on Friday leads me to believe that, pending no further hold-ups, this will be achieved sometime next week and when it does we will be looking at more like 1,000 raw tons per day initially with substantially higher coal acceptance rates.

What would really put my mind at ease would be an updated production report that notes both raw tonnage produced and the reject rate, possibly pertaining to the time period between 9/8 and 10/8. After speaking with Gene, I’m confident that such a document will indeed surface by mid-October.

Reorganization Reports Reflects a Loss for July/Aug

According to Gwenco’s recent reorganization proposal, the subsidiary logged total gross profits of $15,810 on $117,808 in sales during July and August. From a bottom line perspective, the operation best become more efficient, quickly.

Gwenco posted a negative net income of $474,403 on sales of $117,808 for the two month period. Hopefully, their reject-rate and daily tonnage output improve as the mining crew approaches the main coal seam. Management believes that it will, so, let’s see what future reports reveal. For now, I’m willing to reserve judgment until the company enters into full-production mode at the main seam for at least a few weeks.

Per Ton Sale Price Must Improve

According to Gwenco’s contract with White Star Mining, the miner is entitled to $32 per clean ton. $32 per ton divided into the two-month total of $117,808 brings us to a figure of 4,471.6 tons mined.

Further, a little back of the napkin math reveals that Gwenco also pays Happy Trucking roughly $6 per ton for transport:($26,716 in 2 month trucking fees/4,471.6 tons of coal = $5.97). A little more simple math shows that Gwenco’s average price per ton during July and August was approximately $26.40: (4471.6/32 = $26.40).

So, in essence it costs Gwenco $38 in mining and transportation to sell one ton of coal at $26.40 for a loss of $11.6 per ton. For the sake of today’s discussion, let’s assume a reject-rate of 70% during the aforementioned 2-month reporting period. That would equate to 14,905.3 raw tons mined. In theory, if Quest can bring its reject rate into the 30% – 50% range and begin producing higher quality coal – which management indicated is a distinct possibility once the main coal seam is accessed – they could turn Pond Creek into a very profitable mine.

Net-Net

This coming week will be one of the most important in Quest’s existence. If the judge does in fact accept the reorganization plan and allow Gwenco to proceed out of bankruptcy, we should see interest in the stock pick up. We could also see momentum build if the company graces us with an announcement regarding it hitting the main coal seam at Pond Creek, increasing daily output and producing higher quality coal than it has to date.

If you’re interested in the company, here’s my suggestion: take the time this weekend/early next week to weigh the risks of gaining an ownership position in the stock today versus after the BK decision and potential production update. On one hand, the judge could rule against Quest and operations will be forced to cease. On the other, the good news could incite another explosion in both daily volume and PPS. Now priced at $.005, the risk is rather low at one penny for every two shares purchased. You make the call, folks. Hopefully our analysis and links to important corporate documents help your cause.

Thank you for being a loyal Outcast subscriber. We will continue to provide you valuable services.

Quest Mineral and Mining Corp. (OTCBB: QMNM) gained nearly 15% Monday on news that its Pond Creek, KY coal mine has recently achieved full production status and also increased daily output expectations. Currently trading at $.0815, QMNM holds a great deal of upside potential for a number of reasons. Here are a few:

1. Quest is a coal producing company.

Gwenco, QMNM’s wholly-owned subsidiary currently leases more than 700 acres of coal mines believed to hold approximately 12,999,000 tons of coal. Furthermore, Gwenco is already extracting enough coal to require the installation of a larger conveyor system that will facilitate the company’s production of between 1,000 – 1,300 raw tons of coal per shift at Pond Creek.

2. Quest plans to monetize a portfolio of coal properties, not just one mine.

QMNM has publicly stated plans to bring a second mine – Cedar Grove, KY – online by the end of 2008. Cedar Grove is located in very close proximity to Pond Creek and is expected to produce roughly identical raw ton output upon achieving full production status; although initial engineering reports indicate that the coal located in Quest’s second mine is of higher quality than that of Pond Creek.

3. Low-Cost, High Potential Play on the Ongoing Coal Boom

As more established competitors including Arch Coal (NYSE: ACI) and Massey Energy (NYSE: MEE) continue to demand a premium from a stock price perspective, Quest represents a very compelling low cost opportunity to capitalize on the ongoing coal boom. Despite the obvious dangers of investing in companies currently in bankruptcy and trading in the penny range, the potential rewards are monumental.

4. QMNM Made a 4,000% Advance from 6/18 to 6/23

Quest recently advanced more than 4,000% in 3 days on total volume of 643,000,000 shares traded. QMNM closed at $.0016 on 6/18 and hit the high point of its recent run at $.075 on 6/23.

5. $8+ million contract in hand.

Quest has a $8M contract in hand with Logan & Kanawha Co., LLC., and recently noted that it had verbally accepted a 10% higher strike price per ton on coal delivered through December of 2008

What’s it gonna take to get the stock moving northwards?

Since $.075, QMNM’s trading behavior has been erratic at best. Despite tremendously high average daily trading volume for a penny stock trading in the sub $.10 range coupled with a number of stellar corporate announcements, the stock is parked below two cents. In my opinion, if Quest stays on track with recently stated production and rehab goals and quarterly financial reports become available, the stock will begin to receiving a more favorable valuation in comparison to its peers.

Just to give you an idea of what the future could hold for Quest if the company could indeed make good on plans to move out of Chapter 11 and continue bringing lucrative mining properties into production, here’s a look at two of its larger competitors in the Appalachian region

Massey Energy Co. (NYSE: MEE)

The Central Appalachian-based coal provider recently reported a stellar second quarter aside from a $245.3 million pre-tax charge related to ongoing litigation with Wheeling-Pittsburgh Steel Company. Some of the highlights include:

• Record coal revenues of $710.3 for a 38% year-over-year gain.
• EBITDA increased 65 percent to $199.0 million excluding ongoing litigation-related charges
• Avg. revenue per produced ton of coal increased 28% y-o-y to $65.78
• Average produced coal revenue per ton increased 28% to $65.78
• Q2 operating cash margin per ton increased 83% to $15.94
• 28% increase in avg. realized prices on coal shipped in Q2 of $65.78 per ton vs. $51.40 per ton in Q2 2007
• 1st half coal revenue of $1.25 billion and net loss of $51.4 million or $0.64 per share

Massey also accompanied its commentary on second quarter operating results with forward looking guidance into the remainder of ’09 and 2010. Important highlights include:

• Anticipated met coal output of between 13.0 to 14.0 million tons;
• Currently in possession of approximately 6 million tons of unsold or un-priced metallurgical quality coal for 2009; and
• 2009 cash costs anticipated in the $52.00 to $60.00 per ton range.

With close to 81 million shares outstanding and a P/E of 51.33, MEE closed 8/4/08 at $65.91. The stock has recently been upgraded by both Davenport and Standard & Poor’s and continues to attract investor interest as energy demand surges.

Arch Coal, Inc. (NYSE: ACI)

The St. Louis Missouri-based company operates 18 mines in 7 states and owns or controls approximately 2.9 billion tons of proven and probable recoverable coal reserves. With properties in states including Colorado, New Mexico, Kentucky, West Virginia, Illinois, Wyoming, and Utah; Arch saw second quarter profits double and now believes that 2008 will be a record year for the company. Here are some of the company’s second quarter highlights:

• Total sales of 34.4 million tons of coal during Q2 vs. 33.3 in Q2 ’07;
• Revenue increase of nearly 30% from $598.7 million in Q2 ’07 to $785.1 million;
• Net income of $113 million, or 78 cents per share vs. $37.6 million, or 26 cents per share;
• Operating margin increase from $3.51 to $20.16;
• Operating margin per ton averaged $4.21 vs. $1.75;
• Average sale per ton of $21.04, vs. $16.42 during Q2 ‘07 and $18.49 in Q1 ’08;
• First half earnings of $194.1M, or $1.34 per share, $66.3M, or 46 cents per share during the 1st half of 2007; and
• First half revenues of $1.48B vs. $1.17B during the 1st half of 2007.

With just over 144 million shares outstanding and a P/E of 23.17, ACI closed 8/4/08 at a price of $48.51. The company currently provides the fuel for about 6 percent of the electricity generated in the United States and hopes to see that number increase over the next two years.

Bullish Outlook on Both Sides of the Fence

With both corporate executives and independent industry analysts alike bullish on the company’s future potential, Arch Coal appears to be extremely well positioned to capitalize on the continued growth of the coal market.

In a recent investor conference call, Arch chairman and CEO Steven Leer, was quoted as saying “We expect 2008 to be a record year for Arch”; and “Our tighter and stronger guidance is indicative of our confidence in the coal market fundamentals and in our ability to capitalize on these strong market trends”. Within the analyst community, Calyon Securities’ Gordon Howald recently reiterated his “buy” rating and $100 price target on ACI.

Quest Minerals & Mining Inc. (OTCBB: QMNM) is bouncing back today, up nearly 25%, after starting the week off with 4 consecutive red closes. The company conducted a teleconference update for investors on Tuesday that shed light onto recent developments at Quest and also provided some insight into what the future holds for the company.

In my personal opinion, some of the most important topics covered during the call were:

The Pond Creek mine is expected to enter into full-production mode of about 1,500 – 2,500 raw tons per day within the next 30 days. The mine is now active, employs both a first shift of miners and a second shift of maintenance personnel, and will soon hire a 2nd shift of miners to hit full production.

The Cedar Grove mine will be online by the end of 2008 and is expected to produce approximately 1,500 – 2,500 raw tons per day once it enters into full-production mode.

Profitability – Management anticipates being operationally profitable by the end of the 3rd quarter.

Exit from Chapter 11 – Management anticipates moving out of chapter 11 status within the next 90 or so days. This is expected to be facilitated through future payments which will be generated by both operating cash flow and capital from investors, which reportedly have expressed a very high level of interest in Quest as of late.

In Closing:

All eyes will be on Quest in the coming weeks and months with key focus largely being placed on the company’s ability to:

1. Reach full production at Pond Creek;
2. Begin fulfilling previously announced coal contracts;
3. Move out of BK;
4. Bring Cedar Grove online;
5. Post an operational profit as well as significant mining revenues; and
6. Attract additional capital at favorable terms.

If the company can execute on these previously outlined strategic initiatives, current levels will seem like a steal in a few months. Judging by the company’s recent track record of staying on point with outlined objectives, I’m pretty optimistic that they can meet most, if not all of them.

Even in these trying economic times, Outcast Trader continues to conjure up a number of very profitable investment ideas. Over the past two months, (OTCBB: QMNM), (Nasdaq: SQNM) and (Nasdaq: QTWW), have all given subscribers something to cheer about.

After our alert a few weeks back, Quest Minerals and Mining Corp. (OTCBB: QMNM) gained 4431.25% on roughly 643,000,000 shares traded between 6/18 and 6/23. Shares hit a 52-week high of $.075, a MAJOR increase from a measely .0016 close just days before. Coal is becoming a very hot commodity today given the current global energy crisis and Quest is now producing it with plans to soon move its second mine into full swing.

As I mentioned previously, every $1,000 invested in QMNM at 6/18’s closing price of $.0016 would have made you nearly $43,000 in profits if you sold out around the high print of $.075. With all of the volume in the stock, I’m guessing many of you did. Subsequent to today’s production announcement, shares gained over 100% hitting an intra-day high of $.048 before closing up 42% at $.0339 on volume of 133,921,767. An interesting thing to note, today’s news did not hit the wire until roughly 2:30 EST. Only an hour and a half left in the trading day. From that point, QMNM traded over 100,000,000 shares! Now that is impressive! Wednesday’s pullback could have created a very nice entry point for those willing to bet on another run-up. The horses are running and lately QMNM has been the track favorite.

Elemer Piror from Rodman & Renshaw saw his bullish $13.50 target get shattered over the past two weeks. In addition, Charles Butler at Lehman brothers upped his target a few weeks back to $12. Don’t get me wrong, these guys are good and both quite confident in the company’s test becoming the industry norm. Even Oppenheimer and Co. analyst Kevin DeGeeter’s expectation of 17.50; which seemed extremely high just a few weeks ago, could become laughable if wide scale test results match those of the 201 sample population.

TWW Has More Than Doubled Since Our First Mention

Since we first brought you Quantum Fuel Systems Technologies Worldwide Inc. (NASDAQ: QTWW) on May 11th at a price of $1.28, the stock more than doubled and now trades at $2.47, $.48 off of its 52-Week high of $2.98 hit on 6/9. The company is building a diverse portfolio of alternative energy businesses with a strong focus on the hydrogen and solar industries. Don’t forget, shares were trading at their 52-week low of $.37 on 1/18 and have appreciated more than 700%.

As business picks up, I suggest watching this one closely. As I have stated previously, this is one of the best small-cap growth stories I have come across this year. QTWW just goes to show that the proverbial “5-bagger” is quite possible in the penny stock world. You just have to know where to look.

So, there you have it. Three big winners in less than two months. For tomorrow, I suggest watching QMNM very closely. As I mentioned before, word of the company producing coal could fuel another major run-up in the stock. Until next time, folks.

After months of anticipation, Quest Minerals & Mining Corp. (OTC BB:QMNM.OB – News) (Frankfurt:QMNB.F – News), finally delivered today with news that its Pond Creek Location is now producing coal.

For those of you that have been hiding under a rock lately, QMNM shares recently gained more than 4,000% , moving from $.0016 to a high of $.0725 before settling back into the $.02 – $.03 while the market anxiously awaited news of production.

The time has come today. Shares are already trending up on high volume since the announcement which was issued less than one hour ago. We will bring you much more in-depth coverage of Quest’s milestone development in very short order. But, judging by the way the stock ran just a few weeks back, prior to one piece of coal being produced, I URGE YOU ALL TO CONTEMPLATE GAINING AN OWNERSHIP POSITION IN THE STOCK RIGHT NOW!

Quest Minerals and Mining Corp. (OTCBB: QMNM) has gained 4431.25% on roughly 643,000,000 shares traded since market close last Wednesday and made some very happy risk tolerant investors along the way. The stock wrapped up trading on 6/18 at a price of $.0016 before surging all the way to Monday’s closing price of $.0725.

There has to be a correction coming soon after QMNM’s run up of more than 4,000% over 3 days on record shattering volume. Doesn’t there? I”ll be watching closely for another positive operational update in the coming days. The way that Quest has been trading, I’d gamble that another could having the stock moving northwards rapidly once again.