by Travis Johnson, Stock Gumshoe | March 12, 2012 1:15 pm
This teaser ad has been around for a few months in various forms, but it continues to be among the most-queried pitches here at Stock Gumshoe, and there’s a big new push for this ad just today that’s generating even more questions — so I thought I’d toss you a quick reminder of the details here as I while away the time in a generic waiting room.
The pitch is for the newsletter that’s now called Early Advantage[1], edited by Nick Hodge[2] — it used to be called Alternative Energy Speculator[3], but newsletter publishers are nothing if not sensitive trend-followers, and they’ve noticed that “alternative energy[4]” tends to make people grumpy now following the flameout of all those solar[5] energy and geothermal[6] investments … so the letter is now called Early Advantage and it seems — if this latest ad is an indicator — to focus more on resources and breakthrough technologies, the same kinds of stuff we’ve seen pitched over the years as “building blocks” for new energy technologies like graphene[7], rare earth elements[8], and lithium[9]. (A bit of a shame, actually — they did have some interesting picks in alt energy, including a very early tease of Westport Innovations four years ago[10] that would have made patient investors a lot of money).
This latest ad continues their push or the “massive mine” in Canada[11] that has 100 years of valuable metals ready for production — not only base metals like copper[12] but also many of the key rare earth metals. It’s all about harvesting the black shale of Alberta[13] using bleaching, which is basically using bacteria to eat and help “compost” huge heaps of ore and produce a smorgasbord of valuable minerals.
And yes, they’re still teasing the tiny company DNI Metals (DNI in Canada, DMNKF on the pink sheets), which has just about tripled since their “secret” teaser campaign started for this stock back in November (and yes, I told you about it then, too)[14]. And though it’s never easy to tell what might happen to a sub-$50 million company, I remain quite cautious about the stock but it’s an interesting story that might turn into something over the long term.
You have to draw a line somewhere when you’re talking about a $50 million company with hundreds of billions of dollars of potential metal that might be extractable — really, when you think about something this big but this early on and relatively untested (only one bioleaching project has ever been done at scale, and it’s pretty young still), a little sneeze on your spreadsheet could easily make you change your valuation of the company from $10 million to $200 million or back again. Every speculator has to make that call on their own based on your guess about how long it will take to test their metallurgy and bioleaching recipes and how the economics of the whole project might eventually work out (which itself probably depends quite a bit on where prices for molybdenum[15] and copper and other base metals are in five or ten years).
If you’d like an update, the stock has been continuing to climb based both on continuing attention from Angel Publishing[16] and, more recently, thanks to their presentations at the PDAC Conference that always gets the attention of natural resources investors — you can see the story summarizing their PDAC news here[17] — the CEO is basically saying that they’d like to partner with or sell the project to a big steel or mining company, and that “in the right hands” they could be producing in four or five years. So judge that how you will.
The other picks being teased, just to toss out a couple other ideas for you, are for graphite[18] and lithium and beryllium[19]. The graphite pick, teased as a play on the high-potential new nano material graphene, looks like it’s probably Northern Graphite (NGC in Canada, NGPHF on the pink sheets), which is trying to restart an Ontario large flake graphite mine. Haven’t looked at this one in a while, I seem to recall that they launched as a spinoff or a reverse merger or something a little bit unusual like that, but the project is fairly far along with permitting expected in the coming months, you can see their investor presentation here if you’re curious[20].
He doesn’t tease the specifics of lithium particularly, but says he’s found “three ways” you can take advantage of big new lithium demand — so I’ll just throw out the big names for you, the global low-cost lithium brine producers SQM (SQM) and Rockwood Holdings (ROC) and FMC Corp (FMC)[21], with ROC and SQM both having been teased many times in the past, are easy picks to make in the lithium space. All have other businesses and all are profitable and large, so they’re not just lithium plays and won’t be leveraged to huge new discoveries or anything like that, but there are plenty of junior lithium companies around as well if you’re interested in sniffing out some riskier potential — the two that I hear about most, for whatever that’s worth, are Western Lithium (WLC in Canada, WLCDF on the pink sheets) in Nevada and Talison Lithium[22] (TLH in Canada, TLTHF on the pinks) in Australia[23] and Chile[24].
And finally, he teases beryllium as a way to prevent future nuclear meltdowns — and I’d guess, though there aren’t any company specific clues for that one, that he’s pitching IBC Advanced Alloys (IB in Toronto, IAALF on the pink sheets), another gee-whiz new materials company that has been teased many times before by several different publishers. That one has mostly traded in the 15-cent range over the past few years, except for a few times when it has been teased by newsletters and driven up to the 25-30 cent range, starting in early 2010 with a tease from this same newsletter[25] and continuing with Byron King[26]’s pitch for this as a play on the “fourth element” last Fall. Seems like a great story that hasn’t been able to turn into a real business (yet, at least), with revenues growing much more slowly than the share count in recent years.
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I remember telling a few members on here about it when it was still in the high 40 or 50 cent range. But I don’t know if any of them took me seriously. Its going to continue to go up so there you have it. I’d wish I got it back in November though. LOL
Do you have any information on “True Income” advisory…..recommends corporate bonds.
Donna, this is an exchange-traded fund, maturing in 2015, yielding 5.6%. You DON’T hold this ETF until 12/31/15, Steve warns that the ETF w/b full of cash by then, not bonds, but his SELL date is 02/20/15, & I’ll have to ask him why give up that yield so soon. If he says, “once that many bonds are sold, the 5.6% won’t be the yield unless cash indeed yields 5.6%,” as if that will happen, right Travis .
SageNot
Advanced Exploration (AXI-V) really does have a project/prospect that has a multi-generational life. It is a massive iron ore discovery in Nunavet, Canada. They also have a nickle property, also huge. Chinese company Xing Xing (I kid you not) is already affiliated with AXI. The share price is about 33 cents. Please do your due diligence before committing any funds; but it is really interesting.
I read with great amusement the article on Canadas masive Mine …. Why was I amused you may ask! Well the article was so shallow in substance. It was targetting an audience who may be atracted to its substance based on light hearted humor with little connection to objectiveism and any substance that may be useful to a serious investor.
Such articles are a waste of time to enyone.
By the way have you thought of defining what is a ” pink Sheet stock”?
I advise with a degree of seriousness that you take some professional help in the art and practice of effective communication principles and practices.
How inept!
It trades on the TSX Venture so it has to abide by the exchanges rules and regulations. Which includes the need for audited FS and other disclosure requirements. So its not a scam but yes in its in very early stage and might be an interesting speculation although I suspect the price will drift downwards once the touting has stopped.
How rude. Did you miss the parts of the messages indicating Travis’s family was having medical issues? I’m surprised to receive any updates.
Incidentally, I think you may want to take your own advice regarding effective communication. You could start with tone and spelling, and move on from there.
anyone thinking of investing in rare earths now has to focus on companies that produce or have found heavy rare earths as they are worth more
I would invest in a co that is still exploring and has no JORC to verify the breakdowns of the rare earths
No heavies dont go near it as all your paying for is someones lunch.
Graphite = get on the big bus before it leaves as if you miss it you will miss the greatest show on earth
For Canadian listed stocks the equivalent to a JORC is NI 43-101.
I have been plotting rare earth minerals and, also, uranium (since 2013 Russia might not renew our contract to buy uranium from their old missiles). Most of them are penny stocks ,(some are higher) but they aren’t moving up rapidly yet. China is hoarding rare earth and everything it can. Maybe uranium–not sure. I’m waiting for them to really start moving up and doing stock options on them.
that should read wouldnt invest with no JORC
If you are interested in rare earth metals, check out
http://www.techmetalsresearch.com/2012/03/rare-earth-bull/
Gareth Hatch and Jack Lifton seemed to know a lot about this metals!
The thing about Northern Graphite is the real deal. This is going to be a very important company. It is all about the total reserves, strip ratio, scalability and structure of the stock itself.
It is not enough just to have a bit of graphite, lots of folks will have some. It is about having the most expensive stuff and Northern Graphite has the mine that is just about all large flake with high purity. This is the stuff needed for high tech type applications. The mine mechanics is also very nice, shallow ore body that can be mined like stripping off layers.
They also have the right management and the mine will be able to be in operation soon. They have started to look for JV type partners to develop products and probably will be in off take agreements that could add even more value above just the ore value.
Limited number of graphite producers, many will be more industrial type suppliers. Only a few quality large flake producers and most the ore body will vary between flake and powder type production. Northern Graphite is one of the few who can have flake sizes in the +48 mesh size.
NGC soaring today and new 52-week highs on no news that I can find. Perhaps it is being touted in a newsletter. FDR also moving up some but not much volume.
One other heads up too.
Nick Hodge is soon going to be pushing a small solar company called Natcore. (NXT … NTCXF) Be interesting to see what type of spin he will be giving it.
Again this might be a company that can be important contributor with some very interesting technology down the road. Already they have developed some marketable technology for use in silicon based solar cells and probably can have major break thru’s very high efficiency thin carbon based solar cells (roll-to-roll) if they can get the development money. Also something called quantum dots where a solar cell could be built up in layers, a number of approaches at making far more efficient solar cells cheaper than made by anyone today. Not just a talking type execise or lab demo, they have other companies that can make the production equipment to start production once some bugs are worked out.
This is a valid start up type venture. Most solar development is a dream, never to see any form of production. Many of the bigger solar companies are in a sort of dead end situation in terms of any major technical break through that actually can be put into production in the near future that would dramatically increase efficiency / lower cost.
Already Natcore has been picked by NREL to bring to market their discovery of “Black Silicon” coatings and there may be other collaborations in future. Natcore should be signing up a few companies for marketing their first coating systems this year. They probably are one of the major potential break through type technologies that actually can be translated into putting a version on a factory floor. Their systems can be back fitted into exisiting factories. One huge advantage for the first products is solar cells would no longer have to track the sun to have max gain output for the entire day. Lowers manufacturing costs, allows for using less silicon, cells can be thinner, less reflected sunlight off the solar cell itself.
Every once in awhile Nich will mess up and actually push a company that probably will be a valid growth opportunity. Natcore has had a bit of a rocky road as most small start up’s experience but they now have a fully functioning lab. Do need to find some money to get into the far more advanced developments. They have been in talks with a number of companies / country’s about first applications, one of those should result in a contract before too long. Maybe also some government money might finally start to also come their way.
I’ve heard Nick has been in contact with the company and maybe had a tour of their lab. Great spot to pick for promotion, stock is super cheap at this point, right at the start of what will be interesting real developments. Nick might have gotten lucky for once, be something to really brag about further down the road. Tho he isn’t the first to have understood or found what might be a super nice company.
Look for good olde Nick to maybe talk about Natcore in this “Seminar”. Or maybe it will be next week in another mystery tease that you have to pay for. If they can bag a few sales, get revenues started will be a great development company in a number of hi-tech areas.
I’ve been in Natcore for a while now and it seems that 2012 is the year they might finally get some exposure (and more importantly some sales!). Nick Hodge might provide a useful exposure due to the trading volume we can expect when he fnally release its newsletter about the stock. Their LPD process (packed in their ARBox) combined with black silicon is a killer combo and once they finish their optimization (which should happen this year), I expect the solar cell manufacturers to quickly jump onboard.
NGC looks very interesting.. I might diversify a little and get some if Natcore sp get moving up and fast…
The entire solar industry has a bit of a problem. They claim to want to reduce the cost of PV solar to parity with other fossil fuels. But if any really disruptive technology comes along that is a radical approach and could actually work there is a problem.
There is a problem in you can’t really figure out the working life of a solar panel for sure by any manner so the warranty situation can give the business types a bit of worry if you make radical changes to the methods to make the panels. The only sort of disruptive technology on any scale was by Nanosolar. They came out with a thin film solar cell but the first ones had miserable conversion rates. They sort of over came the warranty consideration by selling the entire factory output to one JV partner and they shared the risk. Now Nanosolar has improved their system and they also have an insurance type coverage for panel life and have started to sell to more customers but all are big farm type applications.
So Natcore sort of has that same problem trying to get a present manufacturer to incorporate their technology. You can’t be too radical. Natcore is probably the best chance to be super radical and even get conversion rates up toward 26% (in the range of the space solar panels) by using a layering technique with quantum dots. Already they have produced a very small prototype. Being able to use a “cold” process allows for very thin layering fab type methods and the final product never having to see any real temperatures.
Both Natcore and NGC are interesting is there is not a super amount of stock out floating around and both companies will try to limit any dillution to that only super needed. Natcore probably can attract the necessary money by other means. If / when they can get a few sites operational the other manufacturers have to probably join or fade. The first sites will probably be partial test type outputs instead of full factory conversion at once. Natcore has to have something to point toward to really get the industry attention, fancy claims are normal. Technical progress tends to be very slow and incremental at best.
Lots of interesting things starting, number of USA big box stores looking to go solar. GE trying big time to get in the business but they are taking more a clout type approach where they supply all parts of the system, not just the panels. Their own panels are so-so, maybe even they will be talking to Natcore at some point. CEO Provini really wants to manufacture in the USA.
Again it will be interesting to see how Nick Hodge might try to spin the situations. Every once in a while he has to luck out and find a company with real potential.
Gary, I’m impressed. I’ve been in Natcore for almost 2 years. How did you know that Hodge was going to tease Natcore in his publication?
Just for information, DNI’s largest shareholder is a corporation by the name of 49 North Resources. This corp. invests in start up companies and has told DNI that they will finance going forward to continue to move this project along. 49 North is a publicly traded company and has a very good track record of picking winners. Having talked to the president of DNI myself I invested and have tucked my shares into my back pocket, will hold on for them to prove everything out. Since the last update offered on Stock Gum Shoe, the company has found out that the overburden has rare earths, specialty metals and base metals with good metallurgical rsults. They are also re-examining the shale underneath which is aprox. 100 metres thick to see if specialty metals and rare earths are there. They already know that the 100 metre interval holds base metals but not in the higher concentrations that the 20 metre interval has. If they find out that the lower shale has concentrations of specialty metals and rare earths as well it would add billions and billions of tonnes to the project. So in all the overburden has rare earths and specialty metals, the middle shale has 20 metres of base, specialty metals plus rare earths and the lower shale has base metals and rare earths so far and could have specialty metals. The project could end up being tens and tens of billions of tonnes worth upwards to $40/tonne(overburden)($55/tonne second white specks)(and maybe $40+/tonne for the lower Shaftsbury shale) after processing, based on their latest metallurgy results. In fact I have figured out that the 26 square km area alone could contain some 14 billion tons. The whole area being looked at as the Buckton Zone could itself be 100+ sqkm or 4 times larger than what the they have listed as the mineralized zone). I am not a pumping type of person and was dismayed when Nick Hodges and crew started pumping this stock. I am a numbers person, have run all the numbers three ways from Sunday and have placed my bet. I do however caution that the only thing that could really hold this back is scaling up the metallurgy. The president wants to process 100-200 million tonnes a year which is one huge operation, but in line with many of the oilsands operations right next door. Metallurgy is key here, so far it works at the lab but can it be scaled up? Time will tell. I also have concern over where they will be able to sell the end products too? By going through the amount of shale they plan on, will they flood the market with the rare earths and all other metals or will they be able to under cut the rest of the market in a way that China currently does thereby closing many other mining operations/companies down?
Now there is a guy that does his homework, (Craig T.) which is admirable and sensible.
It is at least interesting to see the many “teaser ads” that mention how wealthy you would be if you got in on the ground floor of the next McDonald’s, Wal-Mart, Microsoft, Apple, Amazon, Google etc.
Nice pitch, but I suspect most retail investors do not take the time and make the effort to fully check out penny stocks to see whether they actually have that potential and end up being “if only” investors, “wish I had” wannabe’s who look back in regret when a company does become a major success, and have an “I told you so” reaction of glee when a company they didn’t invest in (without seriously checking it out) ends up failing.
My point is that penny stock investing requires the same due diligence before investing as more mature stocks which are just as vulnerable to market sentiment, competition from new technologies, incompetent management, greedy owners, changing consumer tastes, government interference with new regulations add infinitum, Enron, GM, anyone?
Size and age of a company are not guarantee’s that a company will be successful on a continuing basis. There is nothing wrong with SPECULATING on a new technology, and as yet unproven mining resources as long as you check things out thoroughly, particularly the competence of management based on PAST performance, adequate financing to carry out stated objectives and at least some evidence of a viable resource.
Hi Craig,
should I then buy “49 North Resources” ?
hans from Germany
Does anyone know if there is reason to be looking at this now? It was WAY down. Is the technology potential gone?
Thanks, Brian