Exploring Frank Curzio’s “Once in a Lifetime Meeting” about a $1 Brazilian Gold stock

Checking out the "Why You Need to Buy this Stock Right Away" teaser/conference call pitch from Phase 1 Investor

By Travis Johnson, Stock Gumshoe, June 11, 2014

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Frank Curzio’s latest pitch for his pricey Phase 1 Investor newsletter has the Gumshoe faithful mighty, mighty curious… he gets us going with a little intro about how he was at an “invite only” meeting at the Plaza Hotel in New York that he said was about investing in Brazilian resources.

The lead-in to the piece is all about the famous and powerful people who were at that meeting — and we end up learning that what Curzio is pitching here is a company that’s been buying up resources in Brazil and “hoarding” those resources (ie, not throwing a lot of money into building mines just yet, but trying to buy up cheap assets waiting for folks to see value in gold resources “in the ground” again).

So we’ll get to explaining which company this is (we’ve covered it before, so it’s not a huge task for the Mighty, Mighty Thinkolator), but first let’s let Curzio set the stage for you a bit… because a big part of the argument he makes is that this stock is connected, with important backers.

“Ambassadors, foreign ministers, a consul-general, senators from both the U.S. and abroad…

“All rubbing elbows with private equity fund presidents, merchant bank chairmen, executives of the world’s largest commercial banks… even a few Ivy League professors.

“We had gathered there for an exclusive, invitation-only summit.

“On tap for discussion, among other things, were the details of potentially quite lucrative investments to be made in the gold-mining industry of Brazil.”

And then, apparently, it was in the “hallway” chatter that this “secret” gold stock came up:

“I was pulled aside for a private chat…

“Suddenly, I was standing in a circle with some of the most powerful men in Brazilian politics, including the man widely expected to be their next President, current Vice President Michel Temer.

“The topic of discussion?

“The future of one tiny gold stock in particular…

“Scarcely three years old, this tiny company is completely off the radar of most investors, including virtually everyone on Wall Street.

“But since its inception, it’s been quietly buying up some of the Para State’s richest gold mines… for pennies on the dollar.”

Some of you might already know what stock is being chattered about here — it’s got a lot of connections in newsletter-land… but we don’t want to spoil the surprise, so here are some more of the clues:

“It only went public a few years ago, and more than half of their shares are closely held by the executives, directors, and a few big, key players in the resource investing world.

“I caught wind of this situation about a couple months ago.

“During my research, I consulted with legendary resource investors like Doug Casey and Rick Rule, and was personally introduced to this tiny company’s founder, who Rick praises as ‘one of the most formidable mining entrepreneurs on the planet under 40.'”

And he describes “hoarding” thusly, in comparing the potential of this stock to Yamana Gold (AUY) or Lumina Copper, which we’re told grew into a multi-billion dollar companies by buying up unwanted assets in the early 2000s, when gold and copper were cheap:

“… a firm engages in “resource hoarding” by raising money during the down times in a commodity cycle and buying up as much of a particular resource as they can at bargain basement prices.”

Then we move on to some more clues about the “connected” folks involved with this company:

“The people at the highest levels of management are among the most connected — and successful — in the business.

“For example, one of their Directors, and biggest investors, is a man I’ll call M.G.

“You might not recognize his name if I told you, but in Brazil, his name is like the Kennedy name is here — everyone has heard it….

“… it was M.G. that organized our meeting in Manhattan, and personally invited everyone in attendance.

“And I sat there in amazement as each and every one of them, from former Lehman Brothers CEO Dick Fuld, to former Senator Christopher Dodd, came over to shake his hand.”

And some other insiders are hinted at:

“One advisor was the former Minister of Regional Politics in the Brazilian cabinet.

• Another was the exploration manager for Kinross Gold in Brazil — where he oversaw the expansion of the country’s largest gold mine.

• One of their Directors is the former Canadian Minister of Natural Resources.

• Their CEO was the Head of Exploration for BHP Billiton, the world’s largest mining company.”

And the founder:

“… the founder of this firm is making a name for himself doing exactly this type of thing — forming a company, getting it off the ground, and making his shareholders rich.

“Back in 2005, he formed an energy-exploration company that went from early-stage asset acquisition to full-on production by 2010.

“After the stock market bottomed in 2009, you could have bought shares for as little as 60 cents. By the beginning of March, 2011, shares had soared to $6.00.”

And the bit of chatter from the secret hallway meeting that got Curzio heated up:

“… during that private meeting in the hallway of the Plaza Hotel, the Vice President of Brazil practically gave the ‘keys to the country’ to this tiny gold firm.

“‘Whatever you need, whatever you need,’ he said over and over again as the founder of this company explained his agenda.”

And finally, after we’ve been inundated with the chatter about how connected this company is, we get a little bit of detail (or as we say here at Gumshoe HQ, “clues”) about the company’s actual business:

“Using their extensive contacts, this company has already accumulated nearly 4 million ounces of gold in the ground….

“The biggest coup happened just at the end of last year… when this tiny firm acquired a gold-mining outfit that had fallen on hard times due to plummeting gold prices.

“From around $1 in the summer of 2011, this gold miner’s share price had fallen to 10 cents. Its market cap had been slashed from around $100 million to $17 million…

“… it also had 2.5 million proven ounces of gold in the ground…

“… this tiny gold hoarding company was able to acquire 2.5 million ounces of gold for just over $5 an ounce.”

So who is being teased here? Brazil Resources (BRI.V in Canada, BRIZF on the pink sheets), which is indeed a tiny gold “hoarder” if you want to use that term, rolling up undeveloped assets in Brazil, and which was founded by the same Amir Adnani who built Uranium Energy (UEC) and has been a (sometimes controversial) promoter of his companies’ stock. I don’t know a lot of details, but he came under fire from short sellers during the first run-up of UEC in part because he also ran Blender Media, which is an investor relations company built for promoting stocks in Vancouver. That doesn’t make him evil, of course, but he’s very much in touch with the importance of promotion in building junior mining companies — after all, these kinds of companies all need to raise money most of the time.

Adnani also has a big fan in Doug Casey and Marin Katusa and the Casey Research folks, who feature him in their NexTen listing as a key young mining executive to watch. And they also bought in during Brazil Resources’ last funding round at the end of the year, picking up shares and warrants.

Which is a good time to let you know that your friendly neighborhood Gumshoe also owns some Brazil Resources warrants (BRI.WT in Canada — late 2018 expiration, 75 cent strike price). I don’t often write about derivatives that I own or trade, since they’re too illiquid to call much attention to them and I’m not particularly confident in these little speculations I make from time to time, but I am occasionally lured into long-term warrants or options on speculative ideas (a “bet on a bet”, in effect). I bought these not because I’m convinced that the company will turn into Yamana Gold and be a great, productive company, but because they are picking up assets fairly cheap and I might get lucky — and it doesn’t hurt that the Sprott folks (Rick Rule et al) and the Casey folks are big fans and owners, which is likely to keep attention high on the stock. This is a 100% downside/500% upside scenario, so I made a small bet — and, to be clear, any real upside depends on the gold market really heating up again. Which is not, despite what you or I or the natural resources investing fans or the might think, guaranteed to ever happen. (For what it’s worth I also did some options speculating on UEC, the other Adnani-connected company — I still hold those options, they’re likely to expire worthless unless there’s a big recovery in uranium prices).

Myron Martin, who writes columns for the Irregulars and mostly is interested in junior mining stocks, has also been a pretty big fan — he urged folks to look at it back in January after Casey bought in, though he mentions the stock fairly often and has owned it since he started writing for us a year ago and still called it a “strong buy” last week.

And the “M.G.” teased is Mario Garnero, who is a director and merchant banker who helped spur an earlier wave of investment in Brazil. The other folks teased as directors or advisors are all who Curzio says they are, you can get more of the story of the company in their investor presentation which, as befits an entrepreneurial and promotional founder, is pretty slick and descriptive (and the photo in Curzio’s teaser pitch, of Mario Garnero with Brazilian President Dilma Rousseff, is from this investor presentation).

I’ll leave it at that for you — this is a promotional company trying to roll up gold mining assets in Brazil but without a lot of cash (or interest, it seems) in pushing to develop those resources, including those acquired in the relatively large acquisition of Brazil Gold late last year that helped bring the shares down and inspire the private placement to Casey et al. They also have a uranium exploration joint venture in Canada, though that came about somewhat accidentally from one of their acquisitions and they’re not likely to spend a lot of money on it (Areva is their partner, the details are here).

And importantly, we should note that these are discovered and somewhat explored assets — but they’re not likely to become mines in the near future. They do not have any proven reserves that I noticed in my skim through their materials, these are indicated and inferred resources they’re reporting that tally up to that 2.5 million or four million ounces that Curzio cites. And such unproven, partially explored resources are obviously worth far less than proven reserves that are known to be economically mine-able, so it’s not surprising that the company trades at a steep discount to the value of gold “in the ground” … pretty much all explorers trade at steep discounts to that potential value, partly because no one knows where gold prices are going and folks are pretty negative on gold these days, but mostly because it’s extremely expensive to build a mine and get gold out of the ground.

So, it’s an interesting company, it generates a good amount of press coverage and has some big investors and well-connected folks on the board and in their ownership rolls, and that’s why I personally speculated that the price might go up sharply enough to make the warrants valuable in the coming years… but other than that, when it comes to actually looking at the mineral assets and the cost to produce and their timeline and who they might partner with or sell to in order to get mines developed, well, I’m no expert on mining fundamentals so for that you’ll have to make your own call. Or, of course, you could join Phase 1 and get in on their conference call to discuss it with Mario Garnero and Amir Adnani next week, but that’ll set you back $3,500. I’m guessing they’ll tell you that you should buy lots of stock in their company and be patient.

What do you think, then? Interested in a piece of Brazil Resources that Frank Curzio is selling a special report about “Why You Need to Buy this Stock Right Away?” Nervous about the valuation or the price of gold or management? Let us know what you think with a comment below.

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59 Comments on "Exploring Frank Curzio’s “Once in a Lifetime Meeting” about a $1 Brazilian Gold stock"

avatar

Dave
Guest
0
Dave
June 11, 2014 4:52 pm

This one seems to fall under the “Lottery Ticket” heading, so the most I’d throw at it (and the price seems to be stabilizing around 80 cents) would be a few hundred bucks. Volume
today was 110K, which is about the liquidity of molasses in January.

Myron Martin
Author
197
June 15, 2014 12:51 pm

You make a good point Dave that most people tend to overlook. Establishment investors tend to think in terms of $5000. and up investments in established companies paying dividends etc. Companies like BRI have to be approached and evaluated differently, they are speculations rather than investments per se deserving as you say only a few hundred dollars until they prove themselves. You add to your stake only as they show appropriate performance and progress to justify a bigger allocation.

Brad Gollhardt
Guest
0
Brad Gollhardt
June 19, 2014 10:04 pm

If Brazilian Resources (BRIZF) was the stock Curzio recommended yesterday in his “secret” conference call, I was surprised not to see much volume today and no rise in price. All the promos were saying get your money ready and get in fast?

hipockets
Irregular
998
June 20, 2014 12:18 am

http://finance.yahoo.com/q/ta?t=1y&l=on&z=l&q=l&p=&a=&c=&s=BRIZF&ql=1 shows BRIZF down about 10 % and higher than normal volume.

hipockets
Irregular
998
June 20, 2014 12:20 am

OOPS. My comment was one day later than Brads – so I’m not comparing apples and apples.

ahmed
Guest
0
June 22, 2014 11:14 am

Dave, if you don’t buy a lottery, you don’t win! Good luck.

vivian lewis
Guest
0
June 11, 2014 4:55 pm

just ask Myron Martin!

Quincy Adams
Guest
0
Quincy Adams
June 11, 2014 5:07 pm

I’m reminded of the quip oft attributed to Mark Twain that “a gold mine is a hole in the ground with a liar on top.” This outfit doesn’t even have a hole in ground, but apparently there’s no shortage of liars.

Solyom
Guest
0
Solyom
June 11, 2014 6:31 pm

The Fair value of the company is (1.10)–>(1.25). So if my broker makes a gift to me of 1100 dollars I will buy 100 shares. Its technical chart does not look much better.

During WWI a tank of molasses broke apart in Boston ion the 15th of Jan 1919. A wall of molasses traveled down the street at 35 mph killed 21 people and injured 150. Molasses in Jan travels faster than most people can ran.

Lon Henderson
Guest
0
Lon Henderson
June 12, 2014 9:18 am

People move slower in January.

hipockets
Irregular
998
June 12, 2014 4:07 pm

Lon, I cannot stop chuckling long enough to tell you how long I’ve been chuckling. You deserve at least 100 “likes”!

history buff
Guest
0
history buff
June 14, 2014 12:08 am

WWI ended on 11Nov1918.

mlped
Member
0
mlped
June 16, 2014 9:32 am

I believe it was heated molasses FWLIW

Deborah G Flynn
Guest
0
June 16, 2014 7:36 pm

I just stay away from these kinds of hypes because Curzo likes to pump up the price for someone then it never moves after they cash out it seems .,

thumb1999
Member
1
thumb1999
June 11, 2014 6:32 pm

A lot of press makes the acquisition of shares (options) only for those who have a lot of money to possibly loose and not be concerned in the end. I, for one, have no need to put my cash into something … unsupported penny stock with no actual assets.

testpack3
Guest
0
June 11, 2014 6:41 pm
Good article Gumshoe. I live in Brazil ( an Englishman), and have a few investments here. There are 1000’s of artisan gold prospectors, and sites. Too many to be properly evaluated for future resources. However, since i’m an investor, take a gander at Serabi Gold, LSE, AIM, SRB. They have opencast, and deep mine deposits of Aug/t in figures which make profitable mining at $1000/oz Au, The company has vast acreages, and is now a PRODUCER, and explorer. Look at the feasibility study, and make your own mind up. The area it is in is undeveloped for Au, and the… Read more »
russelldulong
Member
1
russelldulong
June 15, 2014 7:47 pm

Could you please list the companies as these tickers have different companies. Thanks.

johannes
Guest
0
June 11, 2014 7:20 pm

This stock is blessed with either extremely capable management or a combination of expertise and luck. I have made money on brizf before and I will make money again. This stock will easily hit $3/sh sometime next year.

Ear
Guest
0
Ear
June 11, 2014 7:45 pm

I find tracking down these teasers a bit of fun. I figured this one out after an hours research this morning. I like to see that the Gumshoe gang agrees with my opinion.

Alan Harris
Guest
0
Alan Harris
June 12, 2014 2:41 am

Franchise applicant?

Vaag
Guest
0
Vaag
June 11, 2014 8:47 pm

I enjoy reading all this stuff but I really enjoy dividend stocks. In which case, I think I’ll run fast and see what happens in a few months if they’re still around. The number one goal of politicians in Brazil has been for decades and probably still is: stuff your pockets fast.

blufox
Member
12
June 11, 2014 9:31 pm

I bought 16000 shs around 1/21/14 for .68/share and have a 28.75% gain as of today.
/* Philip */

jempsall
Irregular
6
jempsall
June 11, 2014 9:51 pm
BRI is a legitimate junior miner( which is better than about 80% of the stuff out there). No debt, not a lot of shares out, about $4 million cash, apparently good political connections, and four prospects with modest resources with good potential for expansion. BRI has been recommended by Mickey Fulp who has pretty good credibility in my opinion. Visit his website for more information and form your own opinion. Negatives – their deposits are small and of modest grade and they need a lot of cash to bring anything into production. I am not a buyer but I am… Read more »
tompaol
Member
56
tompaol
June 11, 2014 10:53 pm

Hmm: I held on to a few shares after selling at the peak in March. Maybe I’ll throw a few bucks more and see if nothing else Curzio can give me a ride for the price of an irregular.
Thank you Travis you’re awesome! (also thank you Myron).
Tom

Stuart
Guest
0
Stuart
June 12, 2014 12:21 am

Amir Adnani? With a name like that, about a 99% chance he’s Moslem. No thanks.

Alan Harris
Guest
0
Alan Harris
June 12, 2014 2:45 am

I saw a teaser once for ‘What the Bible tells you to invest in’

hipockets
Irregular
998
June 12, 2014 3:58 pm

There is nothing wrong with being a Moslem per se. There are “good” Moslems, and there are “bad” Moslems, just as there are “good” Christians and there are “bad” Christians. Probably in the same proportion.

If one wants to classify people by their name, one could say that everybody named “Stuart” is a root beer.

Yes, I know, the root beer is spelled “Stewart”. :>)

hipockets
Irregular
998
June 13, 2014 12:10 am
Stuart, I cannot get your comment out of my mind. The more I think about it, the more upset I become. Damn it, man, this is the United States of America. We are a very diverse people of more ethnicities that I can name. People of all backgrounds have contributed and are contributing something good, and sometimes something wonderful, to our society. The fact that it IS the United States of America gives you the right to express your opinion. But when you use that right to demean another, you also demean yourself. Quite often, even more so. “The greater… Read more »
lululeman
Irregular
592
June 13, 2014 10:25 am

Total support here and I might add that the President of the United States has an odd name….the voting public didn’t seem to think ” what his name sounded like” should have any significance. I am happy that I am not the only one disturbed by this persons lack of thought.

BILL
Guest
0
BILL
June 13, 2014 12:50 am

Stuart, KUDOS for your straightforward, unambiguous statement. Left for each to agree or disagree with.

Lulu
Guest
0
Lulu
June 12, 2014 12:32 am

What an out of context comment. Is I miss something cause this makes no sense.

goldnugget
Member
9
goldnugget
June 12, 2014 8:35 pm

Just another bigot in the world. Carry on.

bwd1up
Irregular
181
bwd1up
June 12, 2014 5:25 pm

Something about a Muslim Biblical character named Stewart who likes a root beer while he invests in gold stocks.

midorosan
Irregular
46
midorosan
June 13, 2014 2:46 am

Nice one Bradley, my only comment is that if the mines are run as well as the economy then you may as well throw dollars on the fire. Imagine if during all the hype about BRIC you had invested money in Brazil Inc where would you be now.

gerald4868
Member
3
gerald4868
June 15, 2014 11:48 am

Ghandi once said; “A society should be judged on how they treat their animals.” I don’t know why I posted this, but I did, go ahead and ponder…..

andy451
Irregular
217
andy451
June 15, 2014 1:39 pm
Hey, Gerald! I resent that Ghandi dude statement. I just found a DQ [Dairy Queen] restaurant eight miles from my house, and God their new flame burger was delicious. Holy Cow. Two strips of bacon, swiss cheese, lettuce and tomato, charcoal broiled brazier burgers [ two in number ], and the famous fire sauce. I hadn’t had a DQ burger since 1977, and it was so good, I went to heaven for between 7-11 seconds. In my time up there I took a speed boat ride across the universe, got John Lennon’s autograph [ yeah, yeah, yeah ], read through… Read more »
gerald4868
Member
3
gerald4868
June 16, 2014 6:31 pm

Touche’ my friend, touché!

lululeman
Irregular
592
June 15, 2014 3:59 pm
And I have been sitting on my condo balcony watching 7 deer chowing down on the neighbours apricot and cherry trees as the neighbour quietly enjoys his morning coffee and watches in awe as I do. Contemplating all the beautiful creatures. I myself rescued a starling roasting on the pavement 4 weeks ago, translucent skin, no eyes yet, just a beak. Got up every 3 hours to feed it, 3 weeks later he now joins those beautiful deer in the yards around my condo. We animals are all equal in the circle of life on this planet. Some animals are… Read more »
jempsall
Irregular
6
jempsall
June 15, 2014 4:55 pm

I’ve got a big fat doe in backyard right now that is going to drop a fawn in the next couple of days.

hipockets
Irregular
998
June 15, 2014 10:59 pm

Upstart Investing Newletter Headline:
A Buck made some Doe.

emidave
Irregular
0
emidave
June 15, 2014 4:10 pm

What is the ticker symbol for the BRI warrants? Thanks, Dave

lululeman
Irregular
592
June 15, 2014 4:15 pm

BRI.WT

Solyom
Guest
0
Solyom
June 15, 2014 5:17 pm

I would put money in EWZ (and did) before I would put it in BRIZF. If it got above 1.10 per share it might be worth a few dollars of mad money.

deboruth
Irregular
3
June 16, 2014 1:39 am

I am a bit worried about Solyom, who seems to believe that January 15, 1919, qualified as being “during World War I.” At my school we were told that the Armistice was signed in November, 1918.

Jill
Guest
0
Jill
June 16, 2014 8:36 am

@ Hi Pockets . . . Stuart is a mouse who gets adopted by Humans as a little brother to their son. There are 3 movies: Stuart I, Stuart II, and Stuart III. With the comments coming from the Stuart above, it is clear he is not as intelligent as the mouse Stuart. Meanwhile, when it comes to metals investing, I am sticking with APMEX and what they offer for sale.

apl16
Irregular
0
June 21, 2014 2:04 am

been watching BRI for a long time. Got in just over $.80 a while back. No slam dunk but very good prospects. Did not know about the warrants. Too bad for me as they are doing well. May drop a few grand on them if they dip.

Paul
Guest
0
Paul
July 12, 2014 9:14 pm

Brazil Resources is continually pumped on most of the blogs and podcasts I go to for my weekly gold pablum. It is a common pick of the Casey crowd and advertised again and again. Investing in one of their pump jobs is normally a mistake. I think it is much better to invest in good companies before they haven’t had so much exposure so there are probably better opportunities. No thanks.

Hans
Guest
0
Hans
January 30, 2015 1:44 pm

Curzio seems to have jumped ship from Stansberry, and is now at the Weiss subsidiary Uncommon Wisdom. He just did a 4 part video – the “Midas Code” – pushing this stock again. Might be worth a flyer, as he will reveal the name on Feb 11th (I think…) and a thin stock like this could pop with a little promo.

JoAnn
Guest
0
JoAnn
January 31, 2015 8:17 pm

I just listened to the Brad Hopman video where he introduced Frank Curzio as just joining their group of Adventure Capitalist. The video is “The Midas Code…” It’s a pricey newsletter.

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