Could the “Fourth Element” Make You a Fortune?

Beryllium stock teaser from Byron King solved

By gumshoe, September 14, 2011

Byron King is pitching another teensy weensy rare metals stock for his Energy & Scarcity Investor newsletter from Agora, only this time it’s not the rare earth metals but a really light metal that he calls the “Fourth Element.”

Which brings to mind several of the periodic table-focused teasers of years past, though particularly the breathless pitches about the “fight for the third element” — and yes, if you take a gander at the periodic table they are indeed talking about real and useful industrial metals, the third element is lithium, which has been the focus of many a battery-focused tease as newsletters forecast the era of the electric automobile; and the fourth element, as you might remember from high school, is beryllium. Beryllium, as we are teased by Mr. King, is prized for its light weight, low density, high rigidity, among other things, and is very toxic as a dust but also very valuable as an alloy component, particularly in aerospace applications where light weight and strength are critical.

So Byron King takes us on a long adventure along with the air force and talks about his days as a carrier pilot and mentions the incredible innovations, like drone bombers and long-range reconnaisance, that beryllium and rare earth elements make possible in the defense sector. You can listen if you like — since it was clear partway through what he was talking about, and I’ve heard much the same pitch before, I got a wee bit bored and skipped ahead.

So what is the company he’s pitching as his beryllium play? Well, here’s a taste of the pitch …

“… this small Canadian company has discovered a way to manipulate ‘The Fourth Element’s’ unique properties to make it strengthen and lighten satellites and space structures, aircraft, optical systems, semiconductors, medical imaging and nuclear systems.

“As the story up above demonstrates, this explosive Canadian company’s new ‘super metal’ technology… with ‘The Fourth Element’ and aluminum as its main components… could become an essential element in gun sights, rocket launch rails and guidance systems.

“In fact, this ‘super metal’ technology can be used in an incredible array of different areas… including nuclear, aerospace, defense, telecom, computing, electronics, medical, automotive, oil & gas, and many more…

“Already, this tiny company holds several high-end patents and trade secrets for manufacturing this revolutionary product.

“And this savvy company has also acquired the rights to mineralized properties in two Western U.S. states and Brazil… so they can provide their own “fourth element” metal to their production line.”

And no, I don’t know why they insist on putting “The Fourth Element” in quotes — it is, after all, really the fourth element and they generally only trot out the quotation marks when they’re dissembling or making stuff up.

But regardless, if you’ve been paying attention here at Stock Gumshoe for the past few weeks this is no doubt starting to sound familiar. And if I throw in some more other clues like these …

“This penny stock is currently priced under 22-cents a share and has a tiny market cap of under $42 million…

“So once the news leaks out about this tiny Canadian company’s revolutionary “super metal” breakthrough, you could see this company’s stock price soar 10-fold or more…

“Because the fact is, it would only take a tiny chunk of the defense budget’s $707 billion spending spree to well exceed this Canadian company’s small $42 million market cap.

“And as you’ll see in just a moment, this fast-growing company already has secured some important government contracts and brought onboard a retired General to facilitate even more lucrative government contracts.”

… well, then you’re just going to know right off the bat that Byron King is teasing the same company that Nick Hodge teased for his Alternative Energy Speculator just last month, IBC Advanced Alloys (IB on the Venture exchange in Toronto, IAALF on the pink sheets, where it has an “enhanced listing” on the OTCQX that gives a little extra vote of confidence in their reporting).

And no, not much has happened, news-wise, for IBC in the last month — they got their OTCQX listing with the pink sheets, they got some ho-hum drilling permits for one of their properties (they’re teensy and get much of their revenue from selling machined stuff and alloys, but aim to become vertically integrated by exploring for and developing beryllium mines in Brazil and the US), but I didn’t see anything that seemed to be of consequence other than, this week, a filing for an additional capital raise that, though it sounds small ($5-8 million), will dilute existing shareholders a bit more — so it seems likely that this additional bit of dilution helped to bring the share price down from the recent highs (highs that were, in part, probably provoked by previous teasers from other newsletters).

Of course, with a stock this tiny (thanks to a fall over the last couple weeks it’s now more like a $30 million company, at about 17 cents), $5 million starts to sound like more money — and you don’t need any news to make a little fella like IBC get all jitter-buggy.

There was a long discussion among readers who know a lot more about beryllium than I do back in that first article, so if you’d like a start on digging into more info I’d start there. The stock does have sales and a prominent role in their tiny sector, but certainly doesn’t have profits yet. They’ve done quite a bit of dilution to expand over the last couple years, with new facilities and an acquisition, so I don’t know what their path to per-share profitability looks like or how long it will be.

IBC has also been touted by newsletters before, including previously by the Alternative Energy Speculator folks back in February 2010 — and from my look at the charts, previous touts of the stock by newsletters have been successful in driving the shares up. That isn’t surprising for a tiny stock and a newsletter industry that can make anything sound great in its emails to millions of eager readers, but, in a pattern that we often see repeated for teeny stocks that get the attention of big newsletters, the company hasn’t followed through with enough good news or happy vibes to let the shares stay high and most of these tout-driven highs have gradually waned. Maybe this time it will be different, the company has come some way and they are pretty good at selling their story, but it’s still a tiny stock that can move by 20% if one trader sneezes on his keyboard, so be careful. If you’ve got a thought or two left to share on beryllium or IBC I’m sure we’d all like to hear it — that’s why we’ve got that friendly little comment box down below.

P.S. A curious note for you: IBC is small enough that they use little niche brokers to sell stock — and for this latest offering they’ve hired none other than Euro Pacific Canada, which is the Canadian affiliate of Peter Schiff’s brokerage firm. I wonder if future editions of Euro Pac’s newsletter will pitch IBC to their clients? It doesn’t meet their typical criteria of paying a good dividend or being divorced from the dollar very well (their production and sales seem to be mostly in the US, despite their Canadian listing), but I suppose you never do know …

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