Canadian mining junior Douglas Lake Minerals Inc. (OTO: DLKM, Stock Forum), reported a second quarter loss of $66.9 million on Wednesday and said the cost of acquiring mineral exploration assets in Tanzania, East Africa was partly to blame.

News that Douglas Lake had posted a 33 cents-per-share loss for the three months ended November 30th comes on the heels of concerns in the U.S. and Canada about the lack of clarity in the Surrey, British Columbia company’s public statements.

OTC Markets Group Inc., which operates the OTC Pink Sheets quotation system, recently placed a “limited information’’ warning at the top of Douglas Lake’s trading summary page.

Hotstocked.com, a U.S. service that says it offers free and unbiased research on penny stocks, has also slapped an “unattractive rating’’ on the stock and set a one year price target of 28 cents.

“This company appears unable to meet bills that are either past due or will come due in the next 90 days,’’ Hotstocked said in a report published on December 29.

With only $71,809 in cash at the end of the second quarter and a working capital deficit of $533,395, the report said Douglas Lake is inadequately financed and in dire need of additional funding.

However, that hasn’t prevented investors from paying 80 cents for the Pink Sheets-quoted shares of Douglas Lake, a company that has yet to do any drilling on its flagship Tanzanian properties, leaving shareholders to shoulder the very real risk that none of its properties will prove to be economically viable.

News of Douglas Lake’s latest financial results sent the stock tumbling 6% on Wednesday to a low of 55 cents in early afternoon trading.

But the stock rebounded in late trading to close unchanged at 60 cents, giving company a market value of $142.3 million based on the roughly 237 million shares that are outstanding.

The stock is currently trading in a 52-week range of 80 cents and nine cents.

Douglas Lake is headed by chief executive officer Harp Sangha, a 46-year-old former investment advisor, who previously worked for Global Securities Corp. in Vancouver.

The company is focused on two early stage exploration properties in Tanzania. They include the Handeni project, which consists of four prospecting licenses covering approximately 800 square kilometers in eastern Tanzania and the Mkuvia Alluvial project, which covers four prospecting licenses within a 380 square kilometers area in southern Tanzania.

In a telephone interview, Sangha said the loss in the quarter was the result of Douglas Lake’s decision to use its stock as currency to acquire the Handeni exploration licenses. “The company has also written down the value of properties that are no longer being carried on the company’s balance sheet,’’ he said.

Douglas Lake acquired to Handeni licenses last September by issuing 133 million shares to IPP Gold Ltd., a bottling company headed by Tanzanian businessman Reginald Mengi. At the time, the shares being issued amounted to 61.9% of the issued and outstanding shares of Douglas Lake.

In previous regulatory filings, the company indicated that it would require approximately $2.6 million to fund exploration and administrative costs this year, and to finance working capital.

But given the company’s weak financial position, any future funding will likely have a substantially adverse impact on existing shareholders.

According to its latest financial statements, Douglas Lake has no revenue and has racked up accumulated financial losses of $98 million since its inception in Nevada in January 2004. If additional funding is not secured, the company said it runs the risk that its business plan will fail.

Still, the Douglas Lake website is highlighting the proximity of is Handeni project to Canaco Resouces Inc.’s (TSX: V.CAN, Stock Forum)adjacent Magambazi gold find, which recently sent Canaco shares soaring over $6 from the 52-week low of 36 cents.

Jim Mustard, a vice-president, investment banking, mining with PI Financial in Vancouver, said Canaco is widely expected to prove up a gold resource at Magambazi.

Meanwhile, Sangha said the company is working to prepare a National Instrument 43-101-compliant technical report for the Handeni project. Once that report is accepted by regulatory authorities in Canada and the U.S., the company hopes to raise more money for exploration, likely through a private placement financing.

“That will carry us through for an exploration program as well as a drill program this year,’’ Sangha said.

As Stockhouse reported in a previous Short Report on September 15, 2010, the British Columbia Securities Commission (BCSC) slapped a cease trading order on the junior in response to a February 10, 2009 news releases in which the company announced for the first time, a mineral resource estimate for the Mkuvia property without filing a NI 43-101 compliant technical report to support the estimate.

The cease trading order was revoked on June 16th 2009 after Douglas Lake agreed to file the requested technical report within 45 days.

As Stockhouse has already noted, Douglas Lake raised eyebrows in some quarters by indicating that it may try to attract multiple parties to Mkuvia, including investors from China.

This was in spite of the fact that the junior has optioned the property to New York-based Ruby Creek Resources Inc. (OTC:BB: RBYC, Stock Forum), which can earn a 70% stake in the property by making payments totaling US$9 million in cash and shares over the next two years.

By paying out another $1 million by June, 2011, Ruby Creek has the option to increase its stake to 75%, a move that would reduce Douglas Lake’s interest to 20%. The balance would be held by Mkuvia Maita, the original owner of the underlying prospecting licenses.

A nine-member delegation from China visited the Mkuvia property in October 2009 for due diligence purposes, according to company filings. “Nothing has come of that,’’ said Sangha.

However, he still hopes to do a deal and will travel to China this weekend to conduct a 5-day road show and to try and drum up interest in Douglas Lakes Tanzanian properties. The trip will include a stop off in Beijing, he said.