“The Astonishing Secret of Mexico’s Long-Lost Silver Treasure Maps”

By Travis Johnson, Stock Gumshoe, March 1, 2011

Untold millions of readers (OK, not millions — in the tradition of the folks we write about every day, we’ll use quotes that enable us to make stuff up … so, untold “millions”) have been asking us about the “long-lost” treasure maps that are chatted up in Sean Broderick’s latest teaser for his Red-Hot Global Resources newsletter.

So, I don’t know that it will do you much good today (the stock has already gone up quickly since this version of the ad started a week ago), but I can’t just go and leave a pile of questions unanswered … that’s not the Gumshoe Way.

And according to the version of the ad I just checked online (you can see it here if you want), there’s still plenty of time to get filthy rich — here’s what they sez:

“HURRY! This stock is already beginning to move higher! Send for your FREE field report TODAY!”

Right, so I’ll be right quick. Of course, they also preface this by saying it’s “Very Hush-Hush.”

To which I can only respond, “pish-tosh.”

Like so many mining miracle stories, this one goes back hundreds of years and sports several photos of your intrepid editor wearing a hard hat. Here’s the intro:

“383-year-old maps have led modern-day geologists to more than 2,000 ancient Spanish mines that STILL boast some of the richest silver ore on the planet …

“Now, thanks to this discovery, a tiny, $1.50-per-share miner is about to announce one of the 21st Century’s richest silver strikes.”

And the story goes back further than those 383-year-old maps, Broderick even weaves in that friend and hero to native peoples everywhere, Hernan Cortes, liberator of Cuba and bringer of full employment to central Mexico. Not paid employment, of course, but still, he and his slaves found a mess of silver.

Then the story starts to get modern, and we hear that many of these super-productive mines were shut down after the Mexican Revolution (about 100 years ago), and that the mines that produced for years before that were so fat with silver that the workers ignored all but the very easiest silver veins, and there’s tons of silver left in them thar hills.

Some more from the ad:

“For the rest of the 20th Century, Cortés’ silver was virtually forgotten. The mines and the refining plants were left deserted until 2006, when a virtually unknown Canadian mining company quietly acquired nearly 400 square miles of the richest mining land in this region on the cheap …

“And quickly found that the silver ore that had been discarded centuries ago is unbelievably rich by today’s standards.

“According to the company’s geologist:

‘They (the Spaniards) were mining grades of 1 kilo of silver per ton of ore and above. They left the 500-gram-per ton silver behind.’

“The great news is, thanks to modern mining techniques …

“Veins like these that contain 500 grams of silver per ton of ore are considered to be remarkably rich in today’s world!”

So that’s the basic pitch — and yes, you guessed it, the stock we’re being teased about is that “virtually unknown Canadian mining company.” It often seems that if we ever run out of unknown Canadian mining companies, I’m afraid the newsletter industry might collapse.

And the second part of the value of this company, we’re told — their “secret sauce” — is that they have access to a private collection of ancient maps that show 2,000 old abandoned mines … so they can go to those old mines, sample the tailings and do some drilling, and quickly find more profitable ore to dig up.

To his credit, Broderick doesn’t promise this one as a mega-grower — there is the “astonishing secret,” of course, and he does tell us it should go up by 276%, and that he thinks it should turn into a $5 stock “pretty quickly” and $25 “over time,” in part because he says that the silver and other metals they’ve already discovered are valued at $357 million and come from less than a third of the land holdings, all while the company market cap is far smaller.

And yes, of course miners are almost always valued at a small fraction of the potential worth of the reserves and resources they own under the ground — which, considering the risk and expense of turning drill results and resources into bars of silver or gold, makes perfect sense. I don’t know if trading for 5X their identified resources is a fair number, but it will almost always be some kind of multiple.

Then we get this little extra summary of why the company is extra-special:

“For one, the company’s motto is, ‘Every ounce mined has to make a profit.’ And they live up to that objective: The company has been profitable from its first year of operation.

“It’s already producing silver from several mines in Mexico and can process 500 tons per day at its plant there.

“And the company brings new mines online in near-record time — within 12 to 24 months of discovery.

“As a result, production is exploding — growing by 30% per year! In 2007, the company produced only 348,949 ounces of silver. In 2009, it produced 823,500 ounces — 136% more.

“It’s little wonder, then, that revenues are exploding as well. Plus, because the company produces silver for a song, its margins are sky-high: Mining costs are only about $55 per ton! That translates to a meager $0.0017 per ounce of silver mined!”

That actually sounds pretty good … especially the “making a profit” bit, that’s something that escapes almost every small mining company. And of course, this is a company that’s operating some mines and mills that are going to sound tiny next to many of the big silver miners, so although they’re small they’re not just an explorer — they are actually mining and milling ore, and have been for years.

We’re also told that they don’t have any debt, that Broderick had previously recommended the parent company and gotten 276% gains from that one (I guess that’s where the magic 276% potential return number comes from this time around).

So that’s probably enough, right? I should just tell you the name of the stock?

Very well, the Thinkolator chewed on this one for a mere few moments … and if I’m reading the little printout properly, we must be looking at …

Impact Silver (IPT in Canada, ISVLF on the pink sheets)

And yes, it ain’t $1.50 anymore — more like $2.30. So like I said, may not be terribly worthwhile to consider at this very moment, thanks to a quick run-up, but the ad does tell us that $5 is likely and $25 “actually conservative” in the future, so perhaps you’ll still be interested.

Broderick has pitched this stock for a while and it looks like his visit was almost a year ago, for what it’s worth (unless he went back for some reason, which sounds like a special kind of torture) — and we’ve seen the same photos of him in a hard hat before, on his blog last Spring (yes, exactly the same photos, from the same mine).

And the other stuff in the tease? All seems generally supported by the company’s own materials, and the quote from the CEO about only mining at a profit is accurate — he’s also the CEO, by the way, of Energold Drilling, which owns a big chunk of Impact Silver.

Impact Silver is small (market cap right around $100 million) and profitable, earning three cents a share over the past year, and they do have some cash and no debt, so that’s encouraging. They are drilling and trying to expand production capacity now, and obviously they get a very nice boost from the fact that silver has roughly doubled over the past year (though interestingly enough, they haven’t seen their share price really leveraged to silver until just the last couple months, both the stock and the metal are up roughly the same amount over the last 12 months, and it’s only since November or so that Impact Silver has had huge moves when silver moved.

And I noted that Broderick has certainly written about them before and recommended them to his subscribers before — I don’t know if he’s still gung-ho over the shares right now with the stock well over two bucks, because I don’t know his specific price target, but you can see a lot of his thinking about the stock from his older free article here (also from last Spring as far as I can tell, though it’s not dated).

So whaddya think? It’s been fun watching the silver price go crazy lately, and I like the idea behind Impact Silver, taking advantage of old mining data and cost-effective drilling and exploration to site modern mining operations, but I know little about them beyond that idea and their spectacular share price appreciation in recent weeks. If you’ve got a feeling on the shiny stuff, or something to share about Impact Silver, feel free to let ‘er rip with a comment below.

And as always, we want to know what you think about the newsletters you’ve subscribed to — if you happen to be a subscriber to Broderick’s Red-Hot Global Resources, please click here to review it for your fellow investors. Thanks!


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28 Comments on "“The Astonishing Secret of Mexico’s Long-Lost Silver Treasure Maps”"

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Brian
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Brian
March 1, 2011 6:43 pm

Brodericks picks are by and large moneymakers. over the years he has done a good job of separating wheat from chaff. I have owned impact for quite a while, a good and growing Company. I agree with his target of 5 bucks, it is making money and is tightly held.

Dave Hughes
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Dave Hughes
March 1, 2011 7:10 pm

Hi Gumshoe ,
Well I figured this one out all by myself and dived in on thursday at $2 . Thanks for confirming though , and perhaps thanks for the next leg up tomorrow

Venture Shadow
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Venture Shadow
March 1, 2011 7:18 pm

I figured this one two weeks ago but it was too easy. Between the easiness and the frequent teases I see about this, I figure that the price is supported mostly by the hype. The air tends to leak out after several months as the teasers move on to something else, so unless the company comes across with driving news the price falls. So I am not interested in this one.

AlanJenkins2
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AlanJenkins2
March 1, 2011 7:22 pm

I responded to the teaser,and then cancelled my subscription when I read Sean's non-teased review of his picks – I could do this during the free trial period.I normally wouldn't do this.I did it because Sean's sober analysis in Red Hot Resources itself was such a let-down after the tease.

Greensteves
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Greensteves
March 1, 2011 11:08 pm

It's price isn't increasing nearly as rapidly as Great Panther Silver. But it may have good long term growth potential.

Ipoy PL
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Ipoy PL
March 1, 2011 11:13 pm

Well this stock's sure worth putting in your radar. First of all, it's a producing jr mining company-that itself is already a good prob bet to ride the silver wave. Second, it's tight shares structure-this means management so far has been doing a good job minimizing dillutive fund raising. No debt, and cash flow for further growth? Check. Next let's find a good entry point.

John Kerttu
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John Kerttu
March 2, 2011 12:38 am
.in just days, AmeriLithium could have confirming evidence that it's sitting on one of America's biggest and richest lithium deposits, moving their total toward as much as $3.7 billion! And when that announcement is released, this stock is going to be the next lithium stock to go through the roof: Almost overnight, lithium mining stocks have racked up astonishing profits! Lithium One Inc. – 1,745% gain in less than 8 months Rodinia Minerals – 1,500% gain in less than 8 months Canada Lithium Corp. – 888% gain in less than 8 months American Lithium – 864% gain in just over… Read more »
mak
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mak
March 2, 2011 5:53 am

thank you john.
amellithium has already spiked 15%! wow.

Ipoy PL
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Ipoy PL
March 2, 2011 8:16 am

For those who are holding GPR, it's time to place your Trailing Stop. No ifs, buts, just do it. For those hodling AMEL, to be fair, I held some shares last year, and lost money on it. There you have a complete picture. Do your DD please, and blame no one and be responsible on your decision. The least you can do is know your entry point, Stop Loss point, and Target point or Trail Stop when d market agrees with you. Good luck.

Guest
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Guest
March 2, 2011 11:31 am

I bought amel last year at $1.25 and took a beating so far. I also fell for the teaser on AMOK at $2.25 and took another beating. Now I'm gunshy with these teasers. Thank you Travis for your work.
JR

Hilton Thomas
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March 4, 2011 5:20 pm

Friendly note that I'm sure the GumShoe himself would attest to…if they have to "tease" you into reading about it or advertise it at all, it's probably not worth a crap.

Real stocks with real earnings rise all by themselves….it's actually bizarre how money finds value in the public market, but trust me, it just does.

It would probably worthwhile to short these ideas a few days/weeks/months after their initial runs…that's money in the bank!

diogeron
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diogeron
March 5, 2011 11:50 am

Mr. Gumshoe:

I think you should ban these overly promotional self-serving posts. They just clutter up the real discourse between and among the rest of us who follow and post in good faith.

Myron Martin
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Myron Martin
March 5, 2011 3:24 pm
A word to the wise; ALWAYS read the disclaimers at the end of "teasers" that read like sure things and seem too good to be true, and appeal primarily to GREED! While it is not impossible to make some money with these "going nowhere fast" penny stocks the "pump and dumpers" love to promote, IF you KNOW going in that is what it is, and are a NIMBLE TRADER, but really you might as well head for the nearest casino. I used to admire and respect John Myers when he was Editor of Outstanding Investments and he made many good… Read more »
Mike
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Mike
March 6, 2011 12:56 am

I do enjoy a good story about Conquistadors (what a fun word to say!), and very old treasure maps, though I must say that I found the Gumshoe’s article far more prescient.

The Old Fashioned Way
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The Old Fashioned Way
March 6, 2011 12:58 pm
The other day I read an e-mail from a guy who works for Investment Rarities, Inc., a big midwestern coin dealer. He was saying that the U.S. Mint had just suspended sales of American Eagle Silver Dollar Coins — again — and his take was because they (the U.S. Mint) were not able to keep up with demand and were having a hard time obtaining silver. Has the silver shortage finally arrived? Maybe yes, maybe no, but it’s definitely coming and then we will all wish that we owned shares in at least one legitimate silver miner.
etexfisherman48
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etexfisherman48
March 13, 2011 8:55 am

One thing missing in all this writing is the fact Impact Silver has moved another drilling rig in to increase production. They would not have done this being a conservative company without good reason.

dibs
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dibs
June 27, 2011 11:56 am

I have found that if I short the companies that they are advertising, I actually make money!!
For a change. Every time I followed their advise I lost money. I changed stratagies, It is working!

dharouff
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dharouff
March 1, 2011 4:51 pm

HEY James That sure looks like spam.

Gravity Switch
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March 1, 2011 7:16 pm

Maybe so, though it's certainly moved well from the silver price and the extra attention (and some new resource reports last month) already — good luck to you!

dwarvesden
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dwarvesden
March 2, 2011 12:10 am

Hey Greensteves.what's up with GreatPanther anyway? .been in since 90 cents, keep telling myself to sell and book some profits, but then it pops another ten %. Now i"m between a 4 and 5 bagger. No news i can find. Frozen at the sell switch!!

John Kerttu
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John Kerttu
March 2, 2011 12:39 am
My name is John Myers. I grew up in the world of mining and energy and I've got the kind of first-hand mine-shaft experience that separates my recommendations from those of Wall Street. My specialty is being early to dig up the facts that signal the stock of some little-known natural resource company is about to explode in value! With my reputation on the line, I'm more than willing to tell you that I believe AmeriLithium (SYMBOL: AMEL) is going to be the next super-hot lithium stock. With lithium reserves worth at least $3.7 billion, AmeriLithium has already positioned itself… Read more »
Gravity Switch
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March 2, 2011 9:57 am
You forgot the disclaimer at the end of that "recommendation": " you are hereby advised that John Myers is receiving a fee of $6,500 in USD, from New Amsterdam Value Services Ltd. as compensation for the production of this advertisement. John Myers has not independently confirmed the accuracy, correctness, or truthfulness of the statements and opinions that the advertiser has expressed above. New Amsterdam Value Services Ltd. paid two hundred fifty thousand dollars to marketing vendors to pay for all the costs of creating and distributing this report online." AMEL is being very heavily promoted right now by several paid… Read more »
Brian Martin
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Brian Martin
March 3, 2011 12:30 pm
John, Your reputation on the line unfortunately no longer means much. You may have been a good analyst (maybe still are), but went over to the dark side some time ago in accepting money for shameless pump and dumps. Gold American Mining OTC:SILA is a classic example. Your promo for that was so absurd on the face of it that I was able to sniff it out as a pump and dump without even needing to do the DD. Suggesting that a $1 stock was imminently going to be taken over by a major at $95/share was so ridiculous as… Read more »
Walter
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Walter
March 5, 2011 5:15 pm

As a subscriber to his Pennystocking Silver and as owner of some of his teaching materials, I suggest you start following/learn from Timothy Sykes… his niche is to sniff out pumps and dumps and warn people about them (and play the other side and hopefully make some $'s while doing all this.)

Sean Brodrick
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March 14, 2011 7:36 pm
Hi, Myron I don't remember meeting you at PDAC. Too bad — I always enjoy talking to subscribers to both my free website (UncommonWisdomDaily.com) and paid publications. My paying subscribers are in both IMPACT Silver and Goldgroup, and should have nice gains on both … actually, frakkin' excellent gains on IMPACT Silver, if they bought it on my first recommendation. I did come back from the PDAC with some stock picks … for Red-Hot Global Resources subscribers. And I'm at a new potash developer right now that I'll give the full scoop on … to Red-Hot Global Resources subscribers. If… Read more »
dibs
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dibs
June 27, 2011 11:52 am

OTC: SILA is Trading at 5 1/2 cents today 06/27/2011

It was definately a pump and dump! John Meyeers name is shit in my book!

dibs
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dibs
June 27, 2011 11:54 am

better sell now before it dumps!Enter text right here!

dibs
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dibs
June 27, 2011 11:57 am

Amen to that!

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