Some of you might remember that I wrote a few months ago about a teaser ad for John Doody’s Gold Stock Analyst — and I was personally intrigued by the shares that I wrote about that time (the stock was Minefinders, you can read about it here) and ended up later buying shares for my own account. Since then, the stock has almost doubled — so when a new “hot pick” from Doody comes up in a teaser, I can’t help but want to take a look.
For that ad, the promise was that the $4 stock (MFN) would “at least triple” — and it’s doubled from that price, which is a nice start. Today the promise is that Doody has a new $3 gold stock for us that could triple within six months.
Otherwise, the ad is almost exactly the same as last time — there’s a good description of Doody’s service, plenty of chatter about how he runs this one-man operation out of his Florida condo and is wealthy beyond belief, all thanks to his ability to identify promising small gold stocks and buy them at the right time.
You can read my prior article if you’d like more background on Doody and his system, I’ll just tell you that you can review a sample article of his newsletter on his website (goldstockanalyst.com), and that the main thing that gets individual investors excited is his “top ten” list of gold (and silver) investments that he updates each month. The rest of the newsletter is typically extremely detailed analysis of individual stocks and mines that would force me to really sit down and concentrate if I wanted to understand it.
One caveat: According to the ad this time, Doody is no longer offering a “money back” trial period. He usually doesn’t ever give refunds, but apparently the Stansberry folks talked him into it back in February. For whatever reason, they’ve not been able to get him to offer the refund again (I’m guessing the cancellations were higher then expected, as Doody’s got a pretty solid reputation and probably a lot of folks just wanted to check it out for themselves and not really pay for the subscription).
Doody’s strategy, as the copywriters pitch it, is to buy stock in miners not after the discovery of gold, which often pushes the shares up quickly until investors realize that exploration and production will take many years, but soon before actual mining might take place — in particular, after the issuance of 43-101 documents (those are official filings with SEDAR, the Canadian document repository for their equivalent of the SEC). 43-101 feasibility documents are put together by third party analysts who review the company’s plans and documents and validate the potential economic feasibility of a mining project. (That’s probably not a complete description, but that’s how I understand them.)
Here’s a bit of the tease from the ad:
“Typically, just weeks after this obscure set of documents is released, the stock takes off in anticipation of gold production.
“This is exactly where his favorite $3 gold stock falls right now…
“This tiny North American miner operates in Europe, where it owns three gold deposits totaling 10 million ounces.Are you getting our free Daily Update
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“As usual, when the company announced its exploration program in 2003, a lot of speculators jumped in… expecting the tiny stock to skyrocket.
“But what they didn’t realize is that, it takes years to gather enough proof to release “43-101 Feasibility Documents”… and actually begin producing gold ounces.
“During this time, the stock went into a valley as investors simply fled.
“But recently, the company quietly hit the “43-101” stage… It’s now poised to begin building mines.
“The stock is currently at the foot of a huge upslope. It could triple in the next 6 months alone… then go on to make hundreds of percent more over the next few years.
“Let me show you how to get in on this play immediately… and why I’m so sure it could make you a lot of money over the next few months… “
So … this is not enough data necessarily to be absolutely certain, but I think this is probably …
European Goldfields (EGU in Toronto, EGFDF on the pink sheets)
Why? Well, it does, depending on how you count, have three properties that are in permitting and pre-mining phases (it also has some producing mines), and it’s reasonable to say that the reserves are about 10 million ounces (there are so many ways to classify reserves, and so many dates on which announcements have been made, that a copywriter could reasonably use a wide swath of numbers there).
And I know that this stock has been recommended by John Doody before … and it’s priced right around $3, so that’s enough for me to throw this out as a solid guess. There aren’t a lot of european gold miners who get a lot of attention — one of the others is Gabriel Resources, but their main mine in Transylvania has been mired in environmental review for years and may well not start mining for two years more, even in an optimistic scenario.
So we’ll go with European Goldfields — if you’d like to see what John Doody has mentioned about these folks in the past he did tout it as one of his top ten picks last year at a Resource Investor conference, and again mentioned it this year at the PDAC conference in March (some notes from that talk are publicly available here).
As I hope I’ve made clear many times in the past, I am not an expert on mining — I can’t tell you which 43-101 reports sound great and which smell like fish, nor do I crunch all the data like Doody does (he’s an economist, not a geologist) to assess the value of stocks versus the price of gold and versus their reserves. I can tell you that European Goldfields’ three main exploratory projects are Certej, Olympias, and Skouries (the last two in Greece, Certej is in Romania), and that the basic info on them is available here). The latest updates on those projects, as well as on their producing mines, is available in their latest quarterly report, issued last week, so that’s a good place to start getting familiar with the company if you’re interested.
Doody tends to focus on political stability (ie, Greece is better than the Ukraine) in addition to the reliance on third-party validation (the 43-101 filings), and he prefers miners that are either currently producing or very near producing, and those things all seem to favor Euro Goldfields.
Does that mean this is definitely one of his top ten right now? Nope, it’s just my best assessment — and while my research into these guys has been limited, it is an interesting prospect for those who might be looking for a new gold miner to research. If you’ve got an opinion on these guys, or have a line on a European gold miner that you prefer that matches those clues, by all means, toss it out for us with a comment below. This doesn’t have the immediacy, in my opinion, of Minefinders with the imminent production at the time from their potentially massive Dolores mine in Mexico, but I can see that it’s certainly possible to argue that they’re undervalued relative to their resources in the ground — again, that’s based on very limited research on my part.
If you subscribe to John Doody’s newsletter (and I know at least a few of you do, since I’ve heard quite a bit of anecdotal feedback on him in the past), please consider sharing your thoughts in a brief review of Gold Stock Analyst by clicking here — we’d all like to know what you think.
Full disclosure: As noted above, I own shares of Minefinders, another Doody pick. I am not invested in any other stock mentioned, nor will I trade in any of these shares for at least three days.