Geez, the teaser patch is a little thin this morning — it makes me fear that perhaps we haven’t been putting out enough fertilizer or something, what ever will your friendly neighborhood Gumshoe do if there isn’t a new crop of balderdash and hypetastic promistization to hoe?
I know, I shouldn’t worry — and we’re not completely devoid of over-the-top “secret” stock promises — but I do wonder if a few of the publishers are subconsciously worrying about over-promoting the next great stock just before the market takes a 20% tumble.
And no, I don’t know the market will take a big tumble — but it sure had a lousy January and is down another 2% or so on this first day of February. That’s enough to make my “buy” finger start to twitch a little, but not enough to say we’ve had a real “correction” after a long bull market.
So what shall we cover today? Well, last week I had quite a few folks send over a teased list of stocks with “10-bagger potential” from Marin Katusa and Louis James and the gang over at Casey Research — they’re all in the mining sector, and these ideas are being pitched as part of a campaign to get you to watch the upcoming presentation called Upturn Millionaires, which is being put together by Doug Casey and also includes Rick Rule, Porter Stansberry, Frank Giustra and John Mauldin as a way for these folks to share their strategies for getting wealthy as precious metals recover.
Or, as they put it in one of their press releases:
I don’t know whether this will end up being a good presentation from these folks, and I don’t know how much of this moderated talk will be sharing actual ideas and strategies and how much will be just another echo chamber of folks with similar sympathies agreeing with each other that everyone should own gold and that gold is being manipulated and that inflation is inevitable… or whether the talk will end up being a sales pitch for their various products. That we’ll find out on Wednesday afternoon, if you want to invest the time.
“Upturn Millionaires will show how gold stocks currently have the potential to create a whole new class of millionaires.
“The steep correction of the last few years is presenting us with one of those rare opportunities that come along once, maybe twice in a lifetime—the opportunity to get in at the bottom of a bull market and ride it all the way to the top. Even great companies with serially successful mine finders on their management teams, with plenty of cash in the till to finance their projects, and with proven, high-grade deposits in the ground have been getting hammered making them ridiculously cheap to get into.”
But we can at least try to sniff around and see if we can ID the specific stocks they hint at in one of their ads, and y’all can decide amongst yourselves whether these are appealing potential “10 baggers.”
[In case you're wondering what that "10-bagger" bit means, it's a term popularized by Peter Lynch when he was running the Magellan Fund for Fidelity and writing a series of books that helped explain investing to Americans -- it just means a 1,000% return (a one-bagger, or a single in Baseball terms, would be a 100% return).]
Here, then, are the clues from Katusa’s pitch:
“Ten-Bagger Pick #1
“This company is one of Louis’ all-time favorites because it’s just doing everything right. In the past, it has brought International Speculator subscribers over 400% gains—and he thinks it can and will do it again once the gold market resumes its upward trend.
“Led by a very capable father and son team, the company recently has delivered a world-class gold resource in a mining-friendly North American jurisdiction. And we anticipate even better news for the next resource estimate after the company conducted successful infill and step-out drilling in 2013 that both upgraded and expanded the deposit.
“Louis’ Ten-Bagger Pick #1 has plenty of cash in the kitty to develop its projects and its best-in-the-business management is unbeaten. A prime Ten-Bagger candidate if we’ve ever seen one.”
Not a wide swath of clues to drive the Thinkolator through on this one, but Louis James’ pick here seems very likely to be Almaden Minerals (AAU, AMM in Toronto), which is indeed run by a father-son team, is doing infill drilling to expand the resource estimate at their latest project in Mexico, and does have some cash on the books to pay for more work (about $15 million as of last quarter, it’s a $90 million market cap company).
I don’t know Almaden well, but it’s been a favorite of a lot of resource pundits and I know the Casey folks have spoken fondly of them before — there are several other mentions of it here if you’re curious about following up.
Me, I’ll move on to number two:
Ten-Bagger Pick #2
This company was on Louis’ 5-Bagger list last year; now it’s on the 10-Bagger list because it’s selling for roughly half the price—through no fault of its own.
Pick #2 has produced great drill results on its Eurasian project: exceptionally thick, high-grade gold, as well as substantial, silver-rich intercepts and a new bulk-grade, near-surface gold on the same property.
On top of that, the company has had recent, high-grade hits at its US project in mining-friendly Nevada, which point to a very large potential resource there as well.
This mining overachiever delivered the goods in 2013, and Louis expects the same in 2014 and beyond… and now is the best time to get in.
Well, I can’t tell you for sure on this one — the only one I’m aware of that has projects in both “Eurasia” and Nevada is, well, Eurasian Minerals (EMXX, EMX.V in Canada), and they get more than their fair share of investment newsletter attention, but I haven’t seen any “recent” high-grade news from their Nevada projects and they’re a pretty spread-out, partnered company. The “great drill results” would be from Turkey for them if this is the match, and those results do look pretty impressive at first glance. And yes, the price is about half what it was a year ago — though that doesn’t narrow the field much when you’re talking about gold and silver miners.
They’re a similar size to Almaden, about $80 million, and, well, this one’s a guess. If you’ve a better one, feel free to jump right in with it.
“Ten-Bagger Pick #3
“The risk associated with this company has decreased drastically since Louis’ original recommendation, but the market hasn’t given it any credit for that change and it’s trading in the $0.60 range.
“There have also been excellent drill results from the company’s large, high-grade European gold project indicating that the deposit will get a lot larger.
“Last year that country’s stance on mining wasn’t 100% clear, but now we know that the government is standing behind the project—a huge bonus for Ten-Bagger Pick #3, which should be trading higher as is, but is still held back by the overall poor performance of the gold market.
“As soon as the market turns around, however, this stock should be well on its way to the stratosphere.
“And Louis and I are by no means the only ones seeing the vast potential in the mining sector. There’s no shortage of resource and investment experts—quite a few of them billionaires who made their wealth through contrarian plays just like this—who are willing to go out on a limb and predict an imminent turnaround for gold and gold stocks….”
There are a few stocks that could match this, including my best guess of Gabriel Resources (GBU in Toronto, GBRRF on the pink sheets) and its Rosia Montana project in Romania that has been a political football for at least a decade now and been “on again, off again” with local politicians. The shares did drop to about 60 cents around the turn of the year, but have now gotten back over a dollar again. This is one of those stocks that has a huge mineral deposit which, if developed, is obviously worth more than the company’s market cap … but the “if” is not just put there for the lawyers, I have no idea whether the project will end up going through or not. Myron, who writes a mining column for us here, has written about this one once or twice during the very volatile last six months or so, not sure what he’s thinking about them today. There are other good-sized European projects being explored or developed by other companies, but none that I’m aware of which have traded at or near sixty cents a share in the last few months.
So there you have it — one match, two somewhat wild guesses for the Casey folks’ “10-baggers” file — we’ll see how their presentation goes on Wednesday and if it turns out any more teaser-rich excitement for Gumshoe Nation … and if you’ve got other faves in the gold and silver space that you like better, or think you’ve got better matches for the clues granted us by the folks organizing Upturn Millionaires, well, I’d be delighted to hear ‘em.
P.S. In case you’re wondering about that “Next Bakken” the Casey folks are pitching, that’s still PRD Energy — still waiting for more results from their initial drilling campaign that has been troubled by rough patches and cost overruns. We’ve covered it a couple times since they started teasing it, but haven’t followed news closely — they’re going to have to raise money to do any more drilling beyond this first well, it appears, so they’re presumably hoping they can say something really positive next time they have a press release.