This teaser pitch just started running a day or so ago, and lots of folks are asking about it … and the folks at Casey Research are effectively using this same teaser pitch to try to sell two different newsletters.

The first questions I got about this came yesterday morning, when readers were asking about the article from Casey’s Jeff Clark about “The Only PGM Stock You Should Buy,” which in that article he teased was such a strong, stable producer of platinum group metals that it was being “graduated” from the riskier International Speculator service to the more conservative Big Gold newsletter.

And I was getting ready to write about that one, and tell you which stock it is, when I got an ad from International Speculator that teased exactly the same stock as a “rare 5X Investment” — a stock that they think can go up 500% or more on the back of a supply disturbance and demand spike, like what happened with rare earth metals and with lithium in past booms (we could use the words “speculative bubble” instead of “boom,” but will try to be more diplomatic).

So you get an easy choice — do you want to spend $845 to subscribe to International Speculator and get this pick in a “free special report”… or would you prefer to spend $149 for Big Gold and get the same pick? Or, mayhap, might you prefer to just read a few more paragraphs and learn the name of the stock for free? (You are more than welcome, by the way, to pay us as well… we love welcoming new members to the Irregulars, and you would have already seen the quick answer to this pitch in that handy little box just to the left).

So… assuming you’ll tick the box for the “let’s find out what the stock is for free” option, let’s check out the clues. We’ll use Louis James’ clues, since his newsletter costs more (we are, after all, living in capitalist times — so his clues must be better, right?)

Here’s how he gets us revved up:

“Every time we’ve recommended this unique investment, it’s returned our readers’ money over FIVEFOLD.

“The only drawback: it’s extremely rare. In two decades, this is just the third time we’ve seen this buying opportunity.

“But it’s here again. If you missed it before—now is your chance to get in while the window is open.”

That’s the reference to the fact that two previous overheated markets, in rare earths and lithium, were caused by similar “supply disruptions” to what he’s teasing here for platinum group metals.

I won’t go into all the detail, but James compares this stock to the situation in rare earths in 2007…

“In this case, it was China introducing drastic trade limits—dropping available supplies far below consumption and sparking a global race to find new supplies.

“Our Wyoming-based miner, RES, offered a promising alternative source of rare earths, and in the peak of the mania, it became a prime target for investors.

“Which brings me to our 5x investment and another supply crisis unfolding right now…

“Like rare earths, this opportunity involves a near monopoly on very rare metals: 80% of the world’s supply of these two metals comes from just two countries.”

So that’s a reference to platinum and palladium, which are indeed quite a bit more rare than most “rare earth elements” in geologic terms, and which are mined primarily in Russia and South Africa.

Russia is waved off with really just a generic, “that’s obviously risky” throwaway line or two — including a scary reference to the latest “Russian bombers off California” event (or non-event, as the case may be, NORAD says the Russians get within a couple hundred miles of the US several times a year on training missions, and follow communication protocols when they do so… Russia has been trying to get attention circling Midway and skirting international air space in the Baltic too, so it might just be a continuing case of Putin trying to make sure no one ignores him).

But South Africa is the big deal, according to the ad:

“In South Africa, which accounts for the bulk of world output of these two metals, the situation is even more serious.

“Not an ounce of these metals have been mined in five months.

“A heated and prolonged labor strike has shut down all mines operating here. (For good reason: these are dangerous mines, and most of the work is manual.)

“So far, the strike cost has miners and the workers $12 billion—but even worse, it’s set back production for years.

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“Even if the strike ended tomorrow, it could take a decade to get supplies of these metals back to where they were before the shutdown.”

So the basic idea is that the strikes in South Africa, even if they end soon, will create a “deep and lasting supply shortage” that will benefit his secret company.

Which is probably a good thing, since the strike was declared over yesterday afternoon… around the same time these ads were just starting to run. Even the optimists are saying that some of the production will not soon return, and that it will take several months to get the mines running again, so the disruption is certainly not over. The price of platinum didn’t react much to the news of the strike’s end.

So… how about some more clues to take us out of our misery?

“Like with all our recommendations, our intrepid analyst Louis James investigated this platinum and palladium miner firsthand by going straight to the source.

“While on site, he discovered that this company has two distinct but closely related mine sites. These alone will support the company’s growth for many years.

“But what gives it truly explosive potential is the fact that only nine miles of an estimated 28-mile strike length have been developed between them.

“The company is sitting on one giant mineralized structure. And unlike mines in Russia, it’s very high-grade ore.”

OK, there are plenty more clues… but really, we’ve already got a lot more than the Thinkolator needs for this one. Louis James and Jeff Clark are teasing and recommending Stillwater Mining (SWC)

Which is the largest producer of platinum group metals in North America — Stillwater’s operating mines are in Montana, the only other operating mine I’m aware of on this continent is North American Palladium’s Lac des Iles in Ontario, Canada. Stillwater’s production is mostly palladium, close to 80% lately (the rest is platinum), and they produced more than 520,000 ounces last year.

They also just signed an offtake agreement with Johnson Mathey, which has agreed to buy all their palladium and most of their platinum production at competitive prices for five years, largely for the automotive market. Catalytic converters are the key demand driver for both platinum and palladium, dwarfing the demand for jewelry or other uses, and both metals have been teased (correctly) as beneficiaries of rising auto sales in the past. I think the last time I wrote about these metals was for a Peter Krauth teaser last year (he had bad timing in his pitch for North American Palladium, incidentally), but both metals have been generally rising in price for the last six months or so.

Stillwater was subject to an activist investor revolt last year, which ended with about half the board being voted out and, later, to a new CEO taking over late in the year. The reason for the unrest was the prior management team’s aggressive and expensive efforts to expand through a gold and copper investment in Argentina (called Altar) that appears to have been a pretty substantial mistake, and another platinum group metals project in Ontario (Marathon), both of which are considered non-economic by current management and are essentially on “pause” now as the new management team focuses on cutting costs and improving operations at their core projects in Montana (they had a large writedown of those foreign assets in 2013, which is the reason they didn’t officially report a profit last year).

The only sites listed as “development” projects now are really extensions of their current two mines, and there’s probably not a big rush on those because the recent talk has been about layoffs and buyouts to bring their costs down at Stillwater Mine and East Boulder Mine and at their recycling/refining operations (recycling, largely reclamation of platinum group metals from old catalytic converters, is a substantial part of the business).

Stillwater appears to be making some progress at getting their costs down, they say that their “all in cash costs” are now under $800/ounce (that’s apparently on platinum equivalent ounces, not palladium — platinum is around $1,470 now, palladiium around $830). That cost cutting, plus the working capital that they’ve freed up with their deal with Johnson Mathey to be pretty much their sole customer, mean their cash flow is likely to look a bit better this year… assuming, of course, that prices continue to stay strong.

You can see the company’s investor presentation here, it’s interesting and pretty data heavy so is at least worth a look if you’re intrigued by the story — the long term pricing for palladium probably depends as much on Chinese catalytic converter demand as on general increases in auto sales, though it’s not always a straight and steady line.

There was an interesting endorsement of PAL and SWC from a SeekingAlpha author here, essentially reiterating the “strike + Russian uncertainty = higher prices” argument, and there’s a similarly positive piece from a Motley Fool writer here if you’d like to read up some more. The company is perhaps reasonably valued if you believe the analysts, with predictions that they’ll earn about 60 cents this year and close to a dollar in 2015, but analysts guesses are, of course, all based on what they think not only of the company’s operations, expansion and cost-cutting, but also on their guesses about the future pricing for platinum and palladium.

And that’s about all I can tell you from a quick look — the Casey folks are pitching Stillwater, which is certainly the first name you’d look at for platinum and palladium production outside of Russia and South Africa. As to whether it fits in your portfolio, well, that’s your call — let us know what you think with a comment below.