“Africa’s $10 Billion Secret”

By Travis Johnson, Stock Gumshoe, March 26, 2007

This one was sent in by dozens of readers, one of whom actually provided the name of the company for followup research — I checked it out, and I think the answer he provided is correct. He wants to remain anonymous, otherwise I’d happily give him credit (as I’ll credit anyone else who correctly sleuths out any of these teasers before I get to them).

This teaser has one of the more over-the-top lead-ins of any I’ve seen:

“A flamboyant Russian billionaire… a former KGB agent bent on revenge… a swank
bordello in the French Alps… a $10 billion mineral mine hidden in Africa’s rugged Gold Coast… a 2,600-year-old Egyptian artifact… and a tiny $2 micro-cap stock poised to hit $27 per share!”

This is from Breakaway Investor and Small-Cap Commodity Prospector’s Andrew Mickey.

And the investment is in a cobalt company — here’s one metal I’ve never heard mentioned as an investment vehicle, but according to this ad … “From cobalt’s applications in health, communications, and national defense… modern society could not function without cobalt.”

It’s apparently a critical ingredient in guided missiles, batteries — including hybrid car batteries, aerospace, disk drives, etc. Who knew?

OK, so that’s interesting — what else do they provide to tease out the company name?

The mine in question is in Cameroon, and the importance of the cobalt it holds was noticed by a US investor. And his company has exclusive rights to develop this cobalt mine, perhaps because of some high-level political hanky panky (the Russian intrigue stuff in the teaser relates to Norilsk Nickel and Russia’s dominance of cobalt, which is strategically difficult for the US to handle, so there’s an intimation that a Cameroon-US political deal is part of this mine’s provenance).

“It is estimated that the mine has $10 billion worth of cobalt!”

mining costs are very low. In fact, they are lower than anywhere else in the world… only 96 cents per pound.

“Remember: Cobalt is selling for $30 per pound. With the Kremlin restricting supply, cobalt prices could easily soar to over $50 per pound.”

The company is capitalized at roughly $100 million.

It only recently (Dec. 6) began trading on a “major exchange.”

The company’s
“cobalt assets alone [they have some rights to other mining prospects, too] are worth an easy $3 billion.”

They even add a few fake names to make the teases a little tougher to find — CobalCam is the fake name of the company, and Stevanovich the pseudonym of the US investor.

So do you want to sign up as a “Charter Member” of this investment service? Or would you rather just know the name of the company?

The Stock Gumshoe is guessing you just want the name — and thanks to my anonymous tipper and some sleuthing, I can tell you that the company in question is …

Geovic Mining Corp. (GMC on the Toronto Venture Exchange, GVCM.PK for US investors on the pink sheets)

The best confirmation? The exact cost the company is projecting for their cobalt extraction, with the quote from one of their prospectuses being: “Cash operating costs, net of nickel credits and including production taxes, are estimated at US$0.96 per pound of saleable cobalt.”

That’s a perfect match, and with all the other matches (the location, the general history of the company, even the ethnicity of the pseudonym are all matches — Stevanovich is actually William Buckovic, who owns about 20% of the company now), I’m willing to bet that this is indeed the company we’re being teased about.

I’m not willing to bet it’s a great investment — I’ll save that for more ambitious researchers who can really delve into the Cobalt market, parse the Cameroon political risks, analyze the company’s finances, and tell you how the many outstanding warrants might impact the share price (or whether the warrants are a better buy than the common stock). Like a lot of tiny companies, this one came into being (and came public) as a result of a “reverse merger”, which also usually raises some questions. And I can’t answer those questions.

But at least you know the name of the company — they trade primarily in Canada, so hit sedar.com and read up on all those filings to see if you think it’s really a good idea. And feel free to post some comments here to share your opinion with your friendly Stock Gumshoe and all the others who got interested in this tease.


Related Gumshoe Articles

Leave a Reply

12 Comments on "“Africa’s $10 Billion Secret”"

avatar

stringman
Guest
0
stringman
March 27, 2007 1:31 am

Cobalt also occurs in high per centages (~50+%) in Doloro Stellite hard facing alloys. Canada had a promising play called Canmine Resources until the bottom fell out of the cobalt market in early 2000’s (went to $5/#)and the financial people pulled the plug on Canmine

One Guy
Guest
0
One Guy
March 27, 2007 4:06 pm

Thanks stringman — good to know, so I guess there’s yet another level of risk for Cobalt investors out there, even if you ignore the crazy geopolitical jibberjabber. I learn something new every day.

auntie2000
Guest
0
auntie2000
April 5, 2007 6:15 pm

There is at least one glaring inaccuracy in the sales pitch for this stock. The Russian threat is supposed to come from Norilisk and it says that OM group sold its cobolt division to the Russian company.
If you do internet search using the keywords Norilisk and OM Group, you will find that the company only sold its nickel production company. I wonder how many other errors these guys include to persuade us to sign up for their expensive newsletter?

Clark Champ
Guest
0
Clark Champ
April 9, 2007 7:35 pm

Take a look at cobalts price history http://metalprices.com/FreeSite/Charts/co_9980_charts.html?weight=lb
The prices in the newsletter have been at these high prices before.

Anonymous
Guest
0
Anonymous
April 26, 2007 8:06 am

Auntie2000 there are no inaccuracies,
They did sell only their Nickel Production CO.
If you do another google about Cobalt you will discover it is found, for the most part, intermingled with Nickel. Therefore any Nickel mines would contain the cobalt as well:)

Anonymous
Guest
0
Anonymous
April 26, 2007 8:08 am
any ideas on this one? Now Is the Time… History is About to Be Made Once this 4D seismic technology hits the mainstream in the oil industry, there’s no going back. Just as the creation of OPEC changed the face of Big Oil forever, so will the introduction of this technology to the market. $30 oil by 2010… the possibility of our world’s oil supply doubling with new reserves being discovered… an oil crisis pushed back by decades… It’s truly a historic breakthrough that this small Texas company has achieved. And when they make their delivery of 20,000 of these… Read more »
Anonymous
Guest
0
Anonymous
April 30, 2007 7:23 pm

“the bottom fell out of the cobalt market in early 2000’s (went to $5/#)and the”

There also was a Silver at $5 at these time. You cannot possible compare 2000 and 2007, live goes on, time for
20$/barrel Oil, 10$ Silver, 300$ GOLD is OVER FOREVER!!!!
Natural resources + inflation + USD crash and we have prices go higher and higher, no look back.. no more,- free lunch is over!
Good luck.

Anonymous
Guest
0
Anonymous
May 27, 2007 2:30 am
Anonymous
Guest
0
Anonymous
July 19, 2007 4:30 am

For an extensive first hand report about Geovic Mining start with post #15542 by publicus2222 on the RNO board of Investor Village, and follow up on the references.

There is also a nice summary article at Resource Investor by Richard Reinhard dated 16 Feb. 2007:

“Targeting a Tight Cobalt Market”

In my view, the company is grossly undervalued and there is time for patient investors to accumulate.

Anonymous
Guest
0
Anonymous
August 2, 2007 7:16 pm
Here’s the real deal on “Now Is the Time… History is About to Be Made Once this 4D seismic technology hits the mainstream in the oil industry, there’s no going back.” Here’s the newz … HOUSTON, Dec. 13 /PRNewswire-FirstCall/ — Input/Output, Inc. (NYSE: IO) announced today that it has been awarded a contract to provide 14, state-of- the-art land seismic imaging systems to Oil and Natural Gas Corporation Limited (ONGC), the national oil company of India. Each system includes a pre-specified number of VectorSeis(R) digital, full-wave sensors as well as analog geophones. In total, I/O will be providing nearly 20,000… Read more »
UpdateMan
Guest
0
UpdateMan
February 15, 2008 3:16 pm

Update on this DOG. Stock price at the “teaser” was around $3.50 per share back in 3/26/07. Since then this mutt hasn’t moved above this near term price and has hit a new low around $1.25 per share in January 2008.

Big note is the volume spike when this teaser came out. Volume jumped 3x and steadily declined. I would put my 2 cents at a pump and dump.

Thank you for the research Mr. Gumshoe!

Martin
Guest
0
Martin
April 12, 2008 1:57 pm

4D seismic technology is a bit like the mathematics involved in CDO’s nobody can understand it… There is an old computer term to explain CDO’s and 4D seismic, GIGO Garbage In Garbage Out.

wpDiscuz