What are the “Upturn Millionaires” 10-baggers?

Sniffing out a few stocks teased by Louis James and Marin Katusa

By Travis Johnson, Stock Gumshoe, February 3, 2014

Geez, the teaser patch is a little thin this morning — it makes me fear that perhaps we haven’t been putting out enough fertilizer or something, what ever will your friendly neighborhood Gumshoe do if there isn’t a new crop of balderdash and hypetastic promistization to hoe?

I know, I shouldn’t worry — and we’re not completely devoid of over-the-top “secret” stock promises — but I do wonder if a few of the publishers are subconsciously worrying about over-promoting the next great stock just before the market takes a 20% tumble.

And no, I don’t know the market will take a big tumble — but it sure had a lousy January and is down another 2% or so on this first day of February. That’s enough to make my “buy” finger start to twitch a little, but not enough to say we’ve had a real “correction” after a long bull market.

So what shall we cover today? Well, last week I had quite a few folks send over a teased list of stocks with “10-bagger potential” from Marin Katusa and Louis James and the gang over at Casey Research — they’re all in the mining sector, and these ideas are being pitched as part of a campaign to get you to watch the upcoming presentation called Upturn Millionaires, which is being put together by Doug Casey and also includes Rick Rule, Porter Stansberry, Frank Giustra and John Mauldin as a way for these folks to share their strategies for getting wealthy as precious metals recover.

Or, as they put it in one of their press releases:

Upturn Millionaires will show how gold stocks currently have the potential to create a whole new class of millionaires.

“The steep correction of the last few years is presenting us with one of those rare opportunities that come along once, maybe twice in a lifetime—the opportunity to get in at the bottom of a bull market and ride it all the way to the top. Even great companies with serially successful mine finders on their management teams, with plenty of cash in the till to finance their projects, and with proven, high-grade deposits in the ground have been getting hammered making them ridiculously cheap to get into.”

I don’t know whether this will end up being a good presentation from these folks, and I don’t know how much of this moderated talk will be sharing actual ideas and strategies and how much will be just another echo chamber of folks with similar sympathies agreeing with each other that everyone should own gold and that gold is being manipulated and that inflation is inevitable… or whether the talk will end up being a sales pitch for their various products. That we’ll find out on Wednesday afternoon, if you want to invest the time.

But we can at least try to sniff around and see if we can ID the specific stocks they hint at in one of their ads, and y’all can decide amongst yourselves whether these are appealing potential “10 baggers.”

[In case you’re wondering what that “10-bagger” bit means, it’s a term popularized by Peter Lynch when he was running the Magellan Fund for Fidelity and writing a series of books that helped explain investing to Americans — it just means a 1,000% return (a one-bagger, or a single in Baseball terms, would be a 100% return).]

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Here, then, are the clues from Katusa’s pitch:

“Ten-Bagger Pick #1

“This company is one of Louis’ all-time favorites because it’s just doing everything right. In the past, it has brought International Speculator subscribers over 400% gains—and he thinks it can and will do it again once the gold market resumes its upward trend.

“Led by a very capable father and son team, the company recently has delivered a world-class gold resource in a mining-friendly North American jurisdiction. And we anticipate even better news for the next resource estimate after the company conducted successful infill and step-out drilling in 2013 that both upgraded and expanded the deposit.

“Louis’ Ten-Bagger Pick #1 has plenty of cash in the kitty to develop its projects and its best-in-the-business management is unbeaten. A prime Ten-Bagger candidate if we’ve ever seen one.”

Not a wide swath of clues to drive the Thinkolator through on this one, but Louis James’ pick here seems very likely to be Almaden Minerals (AAU, AMM in Toronto), which is indeed run by a father-son team, is doing infill drilling to expand the resource estimate at their latest project in Mexico, and does have some cash on the books to pay for more work (about $15 million as of last quarter, it’s a $90 million market cap company).

I don’t know Almaden well, but it’s been a favorite of a lot of resource pundits and I know the Casey folks have spoken fondly of them before — there are several other mentions of it here if you’re curious about following up.

Me, I’ll move on to number two:

Ten-Bagger Pick #2

This company was on Louis’ 5-Bagger list last year; now it’s on the 10-Bagger list because it’s selling for roughly half the price—through no fault of its own.

Pick #2 has produced great drill results on its Eurasian project: exceptionally thick, high-grade gold, as well as substantial, silver-rich intercepts and a new bulk-grade, near-surface gold on the same property.

On top of that, the company has had recent, high-grade hits at its US project in mining-friendly Nevada, which point to a very large potential resource there as well.

This mining overachiever delivered the goods in 2013, and Louis expects the same in 2014 and beyond… and now is the best time to get in.

Well, I can’t tell you for sure on this one — the only one I’m aware of that has projects in both “Eurasia” and Nevada is, well, Eurasian Minerals (EMXX, EMX.V in Canada), and they get more than their fair share of investment newsletter attention, but I haven’t seen any “recent” high-grade news from their Nevada projects and they’re a pretty spread-out, partnered company. The “great drill results” would be from Turkey for them if this is the match, and those results do look pretty impressive at first glance. And yes, the price is about half what it was a year ago — though that doesn’t narrow the field much when you’re talking about gold and silver miners.

They’re a similar size to Almaden, about $80 million, and, well, this one’s a guess. If you’ve a better one, feel free to jump right in with it.

One more?

“Ten-Bagger Pick #3

“The risk associated with this company has decreased drastically since Louis’ original recommendation, but the market hasn’t given it any credit for that change and it’s trading in the $0.60 range.

“There have also been excellent drill results from the company’s large, high-grade European gold project indicating that the deposit will get a lot larger.

“Last year that country’s stance on mining wasn’t 100% clear, but now we know that the government is standing behind the project—a huge bonus for Ten-Bagger Pick #3, which should be trading higher as is, but is still held back by the overall poor performance of the gold market.

“As soon as the market turns around, however, this stock should be well on its way to the stratosphere.

“And Louis and I are by no means the only ones seeing the vast potential in the mining sector. There’s no shortage of resource and investment experts—quite a few of them billionaires who made their wealth through contrarian plays just like this—who are willing to go out on a limb and predict an imminent turnaround for gold and gold stocks….”

There are a few stocks that could match this, including my best guess of Gabriel Resources (GBU in Toronto, GBRRF on the pink sheets) and its Rosia Montana project in Romania that has been a political football for at least a decade now and been “on again, off again” with local politicians. The shares did drop to about 60 cents around the turn of the year, but have now gotten back over a dollar again. This is one of those stocks that has a huge mineral deposit which, if developed, is obviously worth more than the company’s market cap … but the “if” is not just put there for the lawyers, I have no idea whether the project will end up going through or not. Myron, who writes a mining column for us here, has written about this one once or twice during the very volatile last six months or so, not sure what he’s thinking about them today. There are other good-sized European projects being explored or developed by other companies, but none that I’m aware of which have traded at or near sixty cents a share in the last few months.

So there you have it — one match, two somewhat wild guesses for the Casey folks’ “10-baggers” file — we’ll see how their presentation goes on Wednesday and if it turns out any more teaser-rich excitement for Gumshoe Nation … and if you’ve got other faves in the gold and silver space that you like better, or think you’ve got better matches for the clues granted us by the folks organizing Upturn Millionaires, well, I’d be delighted to hear ’em.

P.S. In case you’re wondering about that “Next Bakken” the Casey folks are pitching, that’s still PRD Energy — still waiting for more results from their initial drilling campaign that has been troubled by rough patches and cost overruns. We’ve covered it a couple times since they started teasing it, but haven’t followed news closely — they’re going to have to raise money to do any more drilling beyond this first well, it appears, so they’re presumably hoping they can say something really positive next time they have a press release.


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Scott Wheeler
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Scott Wheeler
February 9, 2014 11:57 am

If Zimbabwe doesn’t scare you and you looove a 10% (current yield) dividend, paid quarterly, BTW, Caledonia (CAL.TO in Canada, CALVF in the US and CMCL in Britain) is currently at 52-week lows (sixty cents USD) and definitely worth a look. ZERO DEBT and $25MM in the bank, this little engine that could and can and does is a cash moo-cow, adding just about $4MM clear profit to the bank every quarter – producing just under 50K ounces Au annually. They are about to start using that cash to “grow” by taking advantage of failed miners’ resources. Full disclosure – I own a ocean liner load of it and looove my big fat quarterly divvie. And ohhh, yes, I will also looove that eventual ten-bagger when we hit $6 in a couple of years. These guys are doing really good stuff.

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JT
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JT
February 22, 2014 7:19 am
Reply to  Scott Wheeler

Zimbabwe should scare everyone invested there. Imagine what will happen to gold miners in Zim when the price of Au goes up to USD 3,000. Yeah, the crazy people running that “banana republic” will simply confiscate all mining assets and leave you with nothing….a whole ocean liner of nothing. After a quick scan of Caledonian Mining’s chart, I won’t hold my breath for a 10-beggar, either. While most solid juniors were 10-beggars in 2010-2012, CAL.TO was a little more than a 1-beggar. Dividends are great, but safe jurisdictions DEMAND premiums in bull markets. The kind CAL.TO will likely never see because it’s located in a lawless country.

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Shellin
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Shellin
February 9, 2014 12:48 pm

These guys have been pushing Eurasia and Almaden for years. I remember wasting money and going to a Casey Gold and Silver conference in Las Vegas and Rule was Pushing Almaden and Eurasia back then and that was 7 long years ago. Look at a chart and see how these two have done over the last seven years. Everybody is in AW of these two guys, but I have NEVER made a penny on any recco they put out. They shill their buddies companys at our expense. Happily I learned that quickly.

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RandySpears
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RandySpears
March 25, 2014 12:51 am
Reply to  Shellin

These guys love the prospect generators, which as you noted, have a track record of poor performance. Its a fine, safe way to run a biz as an exploration company but investors should stay far away. PGens are disaster for investors and stay away from anyone recco’ing them.

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whitebloodcell
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whitebloodcell
February 19, 2014 2:30 pm

If anyone is interested I found the full list on another site:

• ATAC Resources (V.ATC, C$1.71, 103.6M SO, 113.7M FD, C$177.2M MCap,www.atacresources.com) — ATAC has already been at nearly 10 times current levels, simply based on a different level of risk appetite in the market. The company’s discoveries in the Yukon are significant and have serious size potential. In a more bullish market environment, this company could be a 10-bagger without changing. However, we expect ore excellent results this year.

• Banks Island Gold (V.BOZ, C$0.64, 34.4M SO, 42.4M FD, C$22M MCap,http://www.banksislandgold.com) — BOZ has the assets and the game plan for developing them that could easily deliver a 10-bagger. There’s technical risk in doing what must be done, and the company only has half the money it needs to build its first mine at Yellow Giant, but it has options for the latter, and we believe it has the right people to address the former. This is not a penny stock, but its market cap is like that of a penny stock and has similarly explosive potential.

• Brixton Metals (V.BBB, C$0.175, 52.5M SO, 81.1M FD, C$9.2M MCap, www.brixtonmetals.com) — Brixton does not yet have a 43-101-compliant resource in hand, and is quite a ways from delivering one. That makes this a higher-risk spec. But it is cheap, and it has delivered spectacular drill results, more of which could easily make this a 10-bagger.

• Carpathian Gold (T.CPN, C$0.29, 555M SO, 590.5M FD, C$161M MCap, www.carpathiangold.com)— We’ve written quite a bit about this company. The bottom line is simple: the company is trading at a discount to the value of the gold mine, is on track to deliver on time and on budget in Brazil, and on top of this, it has a huge gold-copper resource in Romania for which the market is giving it no value. The stock will almost certainly rise based on the former and could eventually become a 10-bagger based on that alone, given the low starting point. It’s hard to put odds on the Romanian blue sky, but whatever they are, free is a great price, and the consequences of success with that project would be huge.

• Global Minerals (V.CTG, C$0.175, 110.8M SO, 144.9M FD, C$19.4M MCap,www.globalminerals.com) — Global’s decision to focus on advancing their known deposit this year, rather than on making new discoveries, would normally make for less explosive upside in the play. However, the stock has gotten a lot cheaper recently without any bad news from the company (due in part to a newsletter publishing a sell recommendation on the stock). It’s not hard to see the stock rising to 10 times its current share price if the company delivers a profitable new silver mine to the market.
• Gold Port Resources (V.GPO, C$0.07, 110.6M SO, 177.5M FD, C$7.7M MCap,www.goldportresources.com) — Gold Port recently delivered a substantial new gold resource to the market that is being subjected to an inappropriate level of country discount, on top of general market sector weakness. There is technical risk in this play, but the stock is so cheap, a 10-bagger or better is easily doable if the company delivers on its objectives.

• GoldQuest Mining (V.GQC, C$0.425, 144M SO, 155.8M FD, C$61.2M MCap,www.goldquestcorp.com) — GoldQuest has become a value play with enormous upside. It’s a spec, but if the company starts delivering more Romero-style drill results, these shares should soar. But even if that doesn’t happen, it appears likely that the company will be able to deliver a significant gold discovery with robust economics to the market. So, while the explosive upside is highly speculative, the base of value looks solid. The company is cashed up and hard at work; stay tuned.
• Matamec Explorations (V.MAT, C$0.185, 120.3M SO, 138.7M FD, C$22.3M MCap,www.matamec.com) — Matamec is another company we’ve written about recently. Again, if the market were giving the company a normal discount for a pre-feasibility project, there might not be quite as explosive potential in the play, but since the market does not yet seem to believe in the Kipawa project, despite Toyota putting millions into it, a shift in perception is all it would take to make a big winner out of this pick. And that’s not even counting the company’s non-Kipawa assets and blue sky.
• Renaissance Gold (T.REN, C$0.455, 30.7M SO, 32.4M FD, C$14M MCap, www.rengold.com) — This is a pure people play. The company does not yet have a flagship project upon which we can project any value added. It does, however, have one of the most successful mineral exploration teams in the world, bar none. And it’s cheap. It’s hard to say where, when, and how the stars will align for this one, but when they do, the results should be extremely gratifying.
As a bonus, here’s a list of companies that have similar excellent potential but are not quite as cheap. These companies seem likely to deliver, but maybe not as much as ten times current share prices. Call it the potential 5-Bagger list:

• Adventure Gold (V.AGE, C$0.255, 65.5M SO, 70.8M FD, C$16.7M MCap, www.adventure-gold.com)— Adventure has a relatively high-grade, open-pit gold resource in mine-friendly Québec. The deposit is not huge, but it’s big enough to matter, and if the company is successful in making it bigger, it could yield very robust economics. The company also has Other People’s Money going into the ground on other projects. There are certainly risks in this play, but if the company delivers on its plans, that success could easily justify five times the current market cap, or more, in a bull market environment.

• Almaden Minerals (AAU, $2.22, T.AMM, C$2.18, 60M SO, 65M FD, C$130.8M MCap,www.almadenminerals.com) — Almaden has delivered a world-class gold resource in mine-friendly Mexico, with several characteristics that are very bullish for project economics. We should see preliminary numbers on that by the end of the year. We will also see drilling all year long, which has the potential to greatly expand the deposit. The company has plenty of cash and best-in-the-business management. If they deliver on their intentions, it would be easy to see a 5-bagger in the stock.

• Exeter Resources (XRA, $1.17, T.XRC, C$1.21, 88.4M SO, 98.9M FD, C$107M MCap,www.exeterresource.com) — Exeter’s monster-sized Caspiche gold deposit in Chile is getting almost no valuation in the market. There certainly are technical challenges, but the size of the prize is certainly commensurate with the risk. Big bulk mining projects are currently out of favor, but Caspiche has a smaller, but still large, higher-grade core that we hope to see the company put some economic numbers on. The committee also has lots of cash and is looking for value unlocking ways to deploy it. That aside, simply as a gold bank with ounces in the ground, this stock is highly leveraged to rising gold prices.

• International Tower Hill (THM, US$1.62, T.ITH, C$1.71, 98.1M SO, 106.2M FD, US$158.9M MCap,www.ithmines.com) — ITH is almost the same story as Exeter, but it has less cash. On the other hand, it also faces far fewer technical challenges and offers excellent leverage to rising gold prices.

• Rye Patch Gold (V.RPM, C$0.355, 146.1M SO, 155.6M FD, C$51.9M MCap, www.ryepatchgold.com)— Rye Patch will probably not quintuple if successful in its legal battle with Coeur d’Alene Mines over the Rochester silver mine in Nevada. However, it could easily double or more on that basis, and that could prompt the market to revalue the company’s substantial portfolio of other assets in the area. Add to this any success in the company’s ongoing drill campaign, and we could see the shares trading much higher when the gold market turns bullish again.

• Sandspring Resources (V.SSP, C$0.37, 132.4M SO, 142.3M FD, C$49M MCap,www.sandspringresources.com) — Sandspring’s Toroparu gold project in Guyana should soon deliver to the market updated economic numbers that we think will be more robust than most investors are expecting. If the company’s neighbors, Guyana Goldfields, are able to raise the rest of the money they need to build their mine, that should greatly reduce the country discount being applied to all Guyana plays. There’s exploration upside as well. Taken altogether, it’s easier to see much higher share prices, even without a major new discovery, in a more bullish gold environment.
Others I see excellent potential in, but maybe not quite at the 5- or 10-bagger level, include Strategic Metals,Sunward Resources, NioGold, and Columbus Gold. I do see potential for a double or better in the rest of the companies in our portfolio, or they wouldn’t be there. However, the purpose of this alert is not to reassure you how good all of our picks are; the idea is to help those of you who have the guts to hunt for big game when we have the field almost to ourselves to focus on the picks that offer maximum potential yield. If the market falls apart for a time, these are the picks that are likely to offer the maximum bang for the buck. Just remember the higher yield entail higher risk.

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hedy1234
Irregular
hedy1234
February 19, 2014 10:36 pm
Reply to  whitebloodcell

This is NOT the list……..

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Joe
Guest
Joe
February 21, 2014 10:41 am
Reply to  whitebloodcell

That’s from March 2013, as it says on “the other site”

Bubbles
Guest
Bubbles
February 22, 2014 12:11 am
Reply to  whitebloodcell

If that is really last year’s 10 bagger list then people should take a good look at it because it’ll make you hesitate before plowing your funds into this year’s list. Every one I looked at was down 50% by year end. Sounds more like a “BagHolder” list.