That’s the headline of a recent ad from Moe Zulfiqar for his Explosive Mine Stocks, a newsletter that has been published by Lombardi for at least several years (with several different editors).
He’s fishing for subscribers for his service, naturally, and using this “tiny stock” and a special offer as bait — so let’s see if we can ID that stock for you, get you a little perspective, and then you can choose whether or not you want to subscribe. Do be careful if you’re someone who likes these “special offers,” the offer I saw was for $1 for a month, which automatically converts to $88 for six months if you don’t cancel, then $295 a year after that if you don’t cancel… so be mindful of the rampup if you might be one of those folks who orders what seems like a “trial subscription” and then forgets about it.
So… right to the clues, then, what is this “Explosive Mine Stock?” Here are some hints from the ad…
“Gold Stock Explosion Trigger #1: Pulling Real Gold Out of the Ground
“This company has been pulling gold out of the ground since 2010. In 2016, they produced 30,000 ounces of gold and 2.5 million ounces of silver.
“What’s more, their 2016 numbers show they are producing gold at a total cash cost of $667 an ounce—almost half the current price of gold!”
One thing jumps out if you’re paying attention to that math: they’re at least as much a “silver stock” as a “gold stock”… at today’s spot price that’s roughly $39 million worth of gold and $42 million worth of silver for 2016.
“Gold Stock Explosion Trigger #2: Making Money in Each of the Past 6 Years
“Since production started in 2010, this company has been profitable every year.
“… this company has a 100% interest in six high-grade gold and silver mines.
“… this company has been paying its profits back to shareholders to the tune of $108 million in dividends since 2010.”
OK, this is getting a little easier … not a lot of gold stocks pay meaningful dividends, particularly not “tiny” ones.
“Gold Stock Explosion Trigger #3: Lots of Cash, No Debt!….
“$10 million in cash in the bank
“No warrants outstanding”
Prett self-explanatory there. What else?
“Gold Stock Explosion Trigger #4: 78 Months of Dividends!
“The company has paid $108 million in cash dividends to its shareholders….
The company has stated on several occasions that its goal is to return approximately one-third of the cash flow generated from operations back to shareholders.”
OK, so that all sounds just lovely. They say that they think gold can go to $2,500 or $3,000 an ounce, which would obviously be a huge boon to pretty much every gold company… and they also say that they see $80 million in annual profits for this stock — that’s based on production doubling to 60,000 ounces of gold per year and a $2,000 gold price (and a $667 per-ounce cost, generating $1,333 in profit per ounce… though “cash flow” is a better word than profit in this case, since resource stocks have to account for their depleting reserves before the accountants will let you call it a “profit”).
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So with all that said, what stock is this? Here we’re being teased to buy Gold Resource Corp (GORO)…
And we’re also reminded that newsletter publishers are often wont to re-use the same ad over and over and over again. I thought this one sounded a little familiar by the time I got halfway through, and it turns out that this “hot idea” from Moe Zulfiqar was also teased using essentially the same words back in 2011 over Mitchell Clark’s signature — though back then, at