“Best Gold Story in 14 Years?” McCoach

“Will your assets be forced into … the New Obama IRA?”

[cue spooky music, please!]

“If you think your 401(k) statement looks bad now, just wait… Your retirement funds could soon be devastated at the hands of a new government initiative to “save” your retirement.

“Still, you can avoid this coming disaster and protect your assets… all while cashing in on potential blockbuster returns of 50-to-1 or more.

“It’s what Greg McCoach calls “one of the most compelling gold finds of the last 14 years.” But you must act now – before the damage is done…”

That’s one of the intros to Greg McCoach’s latest ad for his Insider Alert newsletter, the “upgrade” version of his services that includes access to the microcap mining stocks that he actually buys. The newsletter will cost you about $2K a year … but perhaps he’s got a hot little teaser stock to share with us that we can sniff out for free?

Well, he does tease one — but I have to warn you, this is one of those rare times when I’m not at all certain what the answer is, though I’ll supply a “best guess.”

The “Obama IRA” spiel is a nice hyperactive rant — he goes on about

It’s not all that different from the last time I wrote about this Insider Alert newsletter — back then, McCoach seized on some FDIC reports to tell us that banks would be falling like dominos, and that the rush would be on for silver, pushing up shares of his favorite speculative silver miner.

Of course, it turned out that he was mostly right about the banks collapsing — and mildly wrong about silver, and super-wrong about the silver mining stock he was touting. At least, so far. The last time I wrote about this miner for one of his ads (the company was Canadian Zinc, by the way), silver was close to $17 and the stock was around 65 cents. Now silver, after a big run up recently, is right around $14 … and Canadian Zinc is at about 15 cents.

So just keep in mind that he may or may not be right about any of this — and as with all well-written teases that lead you down a path, the fact that he might be right about part of a scenario doesn’t mean that his predicted outcome is necessarily more likely (ie, the FDIC may be under huge stress as it’s called in to rescue big banks, but that doesn’t necessariiy mean silver goes back to $50 an ounce). That’s not a criticism that’s unique to Greg McCoach or to little mining stocks, of course, but this seemed like a good time to mention it anyway.

So what are we told here?

The big picture scenario is this:

“How a 76-Year-Old Executive Order is Suddenly Your Biggest Financial Threat

“I realize what I’m saying may be controversial…

“But what follows is a news story you’re very likely to see within the next eight months.”

[He then basically inserts a cribbed version of FDR’s executive order on the confiscation of privately held gold, replacing the word “gold” with “retirement assets” … I won’t copy the whole thing here]

“Does that “news story” sound like something from a far-fetched movie based in the future? Something so ridiculous there’s no way it could ever happen in the good ole U.S. of A. that you know and love?

“Here’s the thing:

“It already happened – back in 1933 when Franklin Roosevelt signed Executive Order 6102, effectively outlawing the ownership of gold by private citizens.

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“In fact, much of the text from the “story” above was lifted directly from Roosevelt’s Executive Order. Just substitute “gold” for “retirement assets” and you’ll have the original text.

“And if you think taking a step as drastic as this couldn’t possibly happen in this day and age… Think again!

“Brazil’s government confiscated its citizens’ assets in 1990 – and then introduced legislation seeking the authority to do it again as recently as 2004… and Argentina took steps to confiscate private pensions last October.”

Well, it is an appealing scenario, especially for conspiracy buffs — I’m not sure if it’s at all probably or possible, or why McCoach thinks that owning shares of a Canadian gold miner would protect you from this scenario (I guess we’ll have to assume that you hold those shares outside your IRA). It seems a bit odd, though — from what I understand, FDR’s forced purchases of gold from US citizens was a way for him to devalue the gold-backed currency and inflate the country out of the depression, whereas the Fed and Treasury are perfectly capable of devaluing the currency without any such action right now (and arguably are already doing just that).

And yes, the Argentina bit is real — they privatized their pension system in 1994, and moved to “de-privatize” it last fall as part of their panicked effort to keep the economy afloat and cope with their massive debt. From what I understand, that was largely like privatizing Social Security and them de-privatizing it 14 years later, they didn’t have the confusing mishmosh of different defined contribution voluntary private retirement accounts that we have, these were really pensions. There’s a good blog post about this from the UK here. Not sure what has happened in Argentina more recently as I haven’t been following the story, but this is also not the first time pensions have been used by the government — I think they used pension money to guarantee their massive debt during their last debt-fueled crisis, not sure (and yes, “using pension money to guarantee their massive debt” does sound a little bit like Social Security’s current situation). I don’t know the Brazil story.

That probably opens up enough of a can of worms for folks to fight over for hours, so I’ll leave it there.

But what’s McCoach’s recommended course of action?

Here you go:

“And the prospect of seeing the Obama IRA plan come to pass has pushed me to uncover not just a way to save your retirement assets…

“You can also make back everything you’ve lost during the current economic crisis – and then some – with one simple investment.

“Here’s what I mean…

“Within the past few weeks, I’ve closely examined the potential of a Canadian-based gold and metals exploration company that presents an enormous opportunity.

“To tell you that I liked what I saw would be an understatement.

“That’s because I’ve discovered that this extraordinary company has the potential to see its share price explode from 30 cents all the way to $37 in short order.”

We’ll leave aside for a moment the still-very-much-open question (“Why would buying this stock protect your retirement assets, when your other investments are seized? Can the government seize other assets but not breach the force field around Canadian junior mining companies”), in order to figure out which company this is … if we can.

“This company has staggering short-term profit potential because it’s sitting on not one, but TWO potentially explosive discoveries in a region with an unmatched history of gold discovery.

“The Abitibi Greenstone Belt lies on the border of Quebec and Ontario border in Canada. And over the last 100 years it has produced more than 180 million ounces of gold.”

And here are the rest of the details in the teaser:

“… the location of this company’s projects is even better news. You see, they’re positioned right near existing mines, and as close as three kilometers away from one “major” exploration company. Because of the location, the likelihood of a large discovery is increased… and the infrastructure is already in place to take advantage.

“On top of the favorable location – and the massive potential for each of the two properties – there’s also an astounding geological story behind one of this company’s properties.

“The company drilled three geological holes in 2008 to determine if volcanic massive sulfide was present – and the results were positive. Since that time the company has invested a ton of money drilling additional test holes – and graphite was discovered.

“This is a huge positive indicator – along with the large magma chamber that was discovered – because it’s located next to an aging, producing mine… one that’s owned by a major and figures to be depleted in 2014.

“For all intents and purposes – any new volcanic discovery of size on this property would make it nearly impossible for the neighboring major NOT to buy this company out.”

So … I spent quite a bit of time looking over this one and examining the possible matches, and I must admit that this one has me pretty well stumped. There’s just not enough information in the teaser to be certain, at least not yet. But I can tell you that the closest feasible match is one that I and the folks who contribute on the forum can agree on: Explor Resources (EXS in Toronto, EXSFF on the pink sheets).

It drives me a little bit crazy that I can’t be definitive on this one — there are just too many companies that could possibly match those squishy clues, and this match is far from perfect, but perhaps it will be enough to get you started. One of Explor’s sites is indeed within a few kilometers of a major mine, though it’s not a gold mine — they’re about 2.5km away from the open pit of the old Kidd Creek mine that’s now an underground mine operated by Xstrata. That has been a huge copper and zinc mine for decades, and they’ve recently been exploring further underground but could potentially run out of ore to process in 2014, as teased.

A bit of a stretch, certainly. I have no idea whether or not Explor has found a “magma chamber” in its drilling, and while their very early drilling in 2008 on some of their properties has perhaps been promising, I’m no geologist and I have absolutely no idea whether they hit graphite — or even whether hitting graphite would be a good thing. And to add to the troublesome lack of a precise match here, Explor actually has far more than two properties — they have a dozen or so properties in the Abitiibi Greenstone belt in Ontario and Quebec, though they’ve really only gotten far in drilling two or three of them.

So … I hate to leave it hanging like this, but every once in a while there just isn’t enough data (or enough Thinkolator brainpower, I must admit) to suss one out for you. You’re more than welcome to hop over to the forum thread on this and see if you can pitch in or add your two cents. As I said, this is the best match I’ve seen yet for this teaser — but it’s far from a perfect match.

Oh, and on that “disconnect” between the fearmongering of the ad and the actual company teased? Whether this is Explor Resources or someone else, there is obviously nothing magical about any one company’s ability to protect you from the hypothetical government seizing of retirement assets. If you think that IRAs or 401ks would for some reason be seized by the government, and you believe that owning foreign gold-mining stocks would somehow protect you from that, then there are literally thousands of such companies in the world — and at least dozens exploring in the Abitibi Greenstone area of Canada, which has been responsible for much of Canada’s mineral wealth so far … so take your pick.

And I tend to get headaches if I read too many reports that use words like “assay” and “core” and “inferred,” but if it’s just little gold mining companies in general you’re looking for, you can spend your whole life searching for the next mother lode … some that we’ve looked at here in the past that might be interesting stories for you are Hill End Gold in Australia, Centamin Egypt, Altius Minerals in Canada, Keegan Resources in Ghana, and there are probably hundreds of gold miner discussions over at the forum right now if you’ve got some time on your hands. Enjoy!

Full disclosure: I currently own shares of Hill End Gold and Altius Minerals. I won’t trade in any stock mentioned above for at least three days.



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David Kenyon
David Kenyon
July 19, 2009 10:18 pm

Australia Gold Rush 1872…..Miners halted in reported 20 oz/t Gold by water inflow at 250 feet. Virgin ground with possible bonanza grades to be mined next year with water flow problem solved.

Silver Orchid, needs only $10 million Australian (9 Canadian) to bring this high grade advanced property into production.

For full details of the Hill End Project, please see the qualifying report by Dr. Derek E. McBride, P.Eng. January 27, 2003. Dr. McBride’s summary states that “Golden Gully lies in the historic Hill End gold camp that produced the largest gold specimen ever found (639 pound gold “nugget”).
For the rest of this story, contact me at spudm48@hotmail.com

Disclaimer….some of the above is opinion, not necessarily fact. Do your own due diligence.

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Myron Martin
Myron Martin
August 16, 2009 10:28 pm

YES there is a Mutual fund that focusses primarily on junior mining companies, particularly precious metals and it has superb management.

I refer to the Sprott Gold and Precious Minerals Fund that made me very good money prior to the 08 sell off and is now making a nice comeback.

John Embry is probably one of the most knowledgable and committed “Gold bugs” in the business!~

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