“This rare private deal could score you up to 3,000% returns over time — or more!”
That’s the attention-getting intro to the latest ad from Jim Rickards, who now has yet another paid newsletter service with Agora Financial — this one that he’s selling today is called Jim Rickards’ Private Dealflow, and it seems to be focused on the private placements that so many mining folks are obsessed with.
Private placements, in case you’re unaware, are deals that companies make for financing — they sell shares directly to investors instead of going through an investment bank (as they likely would for an IPO or secondary offering, for example), and those investors often get a bonus in exchange for offering up this capital… often the private placement is done at a discount to the market price, or includes some sort of warrants as “sweetener” for the deal, and sometimes there are also negatives, like required holding periods or shares or warrants that aren’t listed on an exchange, which means they’re hard to sell.
Marin Katusa and Frank Curzio have talked up quite a few private placements in the past year, and sometimes they turn out to be appealing opportunities… particularly if they come with long-term warrants. Sometimes, of course, they also turn out to be hugely disappointing, at least in the short term — like any other investment in a mining project, they can lose value if the price of the commodity (gold, in this case) falls, or if the actual project is a disappointment (poor drilling results, poorly capitalized or managed, accidents or permitting problems, etc.) As should probably go without saying, a company that has to include sweeteners like warrants to raise needed capital is not a company that has a 100% guarantee of success.
So what is the deal that Jim Rickards is pitching now? Here are some clues from his ad about this “Valley of Gold” project:
“… if you get in on a well-run mining operation in this area…
“With a high-quality deposit and a favorable cost structure…
“You could get extremely rich.
“And the operation I’m about to show you is the best one of its scale I’ve ever seen, on all these counts, and more.”
And, to prep you for the fact that this is a $5,000/year newsletter service (that’s about as expensive as retail-oriented newsletters ever get):
“This is a very exclusive, private deal — and it’s not cheap
“The general public can’t get in on the special opportunity I’m about to show you.
“It’s intended for private individuals who meet certain very specific ‘accredited investor’ income and asset criteria (more on these shortly).
“And I’ll tell you right up front — even if you do meet these criteria…
“If you’re not comfortable with the thought of investing at least $25,000 in a gold mining venture…
“Or if you’re uncomfortable with the risks of private investing…
“This deal is not for you.”
That’s when most of us should walk away, be honest with ourselves, and say “this deal is not for me” … but, of course, we still want to know what the company is. Me no like secrets.
What else do we learn about this project?
Well, it’s in the Abitibi-Greendstone Belt in Quebec, which is one of the major gold-producing areas in North America over the past century…
“According to my colleague and partner in vetting this deal — geologist and all-around genius Byron King…
“Val-d’Or sits on top of an underground rock mass called the Abitibi Greenstone Belt.”Are you getting our free Daily Update
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Here are the clues I gleaned from the ad:
“This project is currently in the ‘pre-production’ phase….
“… well over 1,200 holes of varying depths have been drilled on site…
“And over 122,000 meters of core samples have been collected from those holes….
“Intersected ore grades of….
“18.7 grams of gold per ton.
“32.6 grams of gold per ton.
“57.0 grams of gold per ton!”
That’s very high grade, as Rickards notes (he says it’s “up to 16 times as much gold as the average grade of ore rock that Canadian mines are currently extracting”).
What else? Rickards cites one super-high grade sample:
“This incredible intersection of over 236 grams per ton…
“With chunks of pure gold plainly visible in it!
“Like Byron said in his video a moment ago, there are just over 28 grams in an ounce…
“So that’s over 8.3 ounces of gold per ton of ore rock from this particular vein!
“That’s more than half a pound of gold — around $10,500 worth, at today’s prices.”
There are actually about 31 grams in a troy ounce, which is what most of us deal with when talking about gold, but we’ll give them the benefit of the doubt on that. If you’re doing the math, that’s 7.6 troy ounces per ton for that sample, which is still very impressive and would be worth $9,500 if it were above ground and refined (that’s at today’s $1,250/oz gold price).
What else are we told about this mine? It’s expected to begin full scale production in about 18 months, in January of 2019, and Rickards says he expects gold to be at $1,450 an ounce by then (he extrapolates that from the 20% move gold has made in the past 18 months, assuming that it will continue on that trend — which is certainly possible, though I have no idea whether gold will be at $800 or $3,000 in a year and a half).
Rickards also lays out some scenarios for future profits that he says were calculated by Dan Amoss, who is apparently the “financial analyst” on this service (Amoss has been at Agora Financial for