Gerardo Del Real is peppering us with pitches for his Junior Resource Speculator ($1,999/yr, 60-day refund period), and the core of that pitch is that we’re in the early stages of a commodity price supercycle, with lots of different natural resources poised to soar… which then leads into a pitch for his three favorite 1,000%-gain opportunities, all of which are junior mining names, the most speculative and volatile stocks in the natural resources space.

And we were curious about which stocks he might be teasing, so let’s dig in and see what the story is…

First, the big picture:

“The supercycle is just getting started, there are plenty more opportunities to capture gains.

“Let’s bring back the chart we showed from the 90s.

“Notice how there are several pullbacks in 1999 and 2002, just before the entire commodity index soars over the following decade.

“Pullbacks in Phase One of a supercycle are normal, and it’s typical for them to occur right before this entire sector takes off.”

So that’s the basic idea, we’ve had the first phase of a commodity supercycle, which I guess was driven in part by the spike in prices after Russia invaded Ukraine, and now we’re getting ready for the next, more rambunctious part of the “supecycle”… from the ad:

“We’re seeing a pullback right now as the supercycle gears up for Phase Two.

“This presents the perfect opportunity to buy in at a discount.

“Once this pullback ends, I see prices shooting upwards, and the chance for another opportunity to buy this low will likely be gone for two decades….

“This new supercycle will be the biggest, most profitable one yet.

“The reason why is because we’ve never had this much cash circulating through our economy….

“The Federal Reserve has printed so much new cash, we have nearly 3-times more than we did in 2008.

“This excess cash is flowing into hard assets and commodities because Americans are waking up to the fact their money isn’t safe…”

He points out a couple other things that are driving what he believes is a “supercycle,” including the “reshoring” of American manufacturing, which will increase demand for raw materials in the US and force some competition for materials with China, and the ‘clean energy’ push that is expected to drive battery metals, rare earths and copper prices higher.

Then we get to the “you can get rich” part of the ad:

“There are three parts to the Trade of the Decade.

“Each investment could deliver 1,000% gains or higher based on my analysis.

“Which means if you follow what I’m about to say, you’ll have three separate chances at 1,000% gains or more.

“This really is the ultimate “spread your bet” speculation.

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“Someone can take a small investment then get in early on three potential 1,000% winners.

“It’s just not possible to accomplish this with most investments, in or outside of the stock market.

“And I’m going to share all three parts of the Trade of the Decade, right here, right now.”

It’s true, quick 1,000% gains are rare — you usually only see them in investments that have a very low probability of success, like call options or tiny biotech or junior mining stocks that have a big surprise, like fantastic clinical trial (biotech) or drilling (junior miner) results.

So which ones does Del Real like? Start with the shiny stuff…

“The first part of the Trade of the Decade is gold.

“Central banks have bought gold for years, but many decreased the amount they were accumulating when COVID-19 hit.

“In 2020, central banks bought 60% less gold than they did the year before.

“They were forced into doing this to free up money for stimulus programs.

“But now that the pandemic is finished, central banks are returning to the gold market and they’re making big purchases.

“The world’s Central Banks bought a record 1,082 tonnes of gold in 2022. And followed that up in 2023 with a near-record 1,037 tonnes….

“Russia is hoarding gold to skirt western sanctions, they have over $135 billion worth right now….

“Uncertainty motivates both governments and citizens to buy gold in large quantities, and it’s fueling its rise in this supercycle….

“My analysis indicates gold will reach $2,700 within 2 years from now, and within 5 years, it will break $3,700.”

But you’ll never see a 1,000% gain from just owning gold, of course — well, not in a hurry, at least — so it’s a junior in the gold space that Gerardo’s got his eye on…

“Owning gold bullion is a wise move for preserving your savings, but it’s not part of the Trade of the Decade.

“You have to look deep in the gold mining industry to find the big profit potential if that’s what you’re after.

“The first part of the Trade of the Decade is a gold exploration company with a market capitalization of around $3.5 million right now.

“To put that into perspective, that’s how much a single McDonald’s franchise makes in a year.

“It’s tiny. But this stock is the first junior miner to consolidate the Central Mexican Silver Belt, which is full of high-grade results and past-producing mines.

“I was so impressed when I met the CEO in person, I cut a check to invest right then and there.

“His management team has more than 30 years’ experience in the discovery and financing of precious metals projects in Mexico, Canada, the U.S and Latin America.

“The company also owns a royalty stream with a Canadian-based silver and gold producer.”

Oh, for crying out loud…. $3.5 million!?!? It’s not terribly responsible for me to even write about a stock that tiny for a few thousand of my closest friends here at Stock Gumshoe.

But I suppose I’ve come this far, might as well give you the opportunity to investigate it for yourself — this is almost certainly Kingsmen Resources (KNG on the Venture in Canada, KNGRF OTC in the US).

What’s the story with them? They match the clues, and that’s about where my insight ends. They have consolidated a small area of mining claims in Mexico, including the sites of at least two old mines that haven’t been explored recently, and they’re planning on doing some drilling on those sites this year. They do also own a 1% NSR royalty on part of a property that is being explored by GoGold Resources (GGD.TO, GLDGF), also in Mexico. The market cap has risen a bit, probably entirely because of attention from Gerardo Del Real, so it’s more like $5 million now.

It takes very little new attention to cause the price of a tiny little sub-$10 million stock to bounce around a lot — the average trading volume is less than $5,000 worth of shares, total, per day, and before this ad started running a few weeks ago, the stock often went a week without trading at all. Suffice to say, nanocap stocks like this are extremely illiquid — you can often buy them, if you’re willing to bid up the price, but you can’t buy a lot… and selling illiquid investments is generally much harder than buying them, so be very careful about making any assumptions that you’ll be able to sell when you want to.

Here’s what Del Real says about it…

“As gold’s price rises, this small stock will earn more and more from the boom.

“I expect a flurry of news and attention over the next several months.

“One thing I can guarantee…

“At a three-and-a-half-million-dollar market cap, this junior gold miner could easily multiply its value…

“It could definitely see 1,000% gains, maybe even higher.”

Maybe. This is essentially a lottery ticket type of investment — if they report exceptional drilling results and gold and silver are flying higher later this year, perhaps it will go up dramatically (in which case, they’ll almost certainly sell shares to fund their drilling work and their options on the properties)… if they don’t, or if shinier things attract attention, it could easily fall 50-80% in a few weeks just from a lack of buying interest, even if there’s no bad news.

I have no insight into the quality of the project, but they do seem to actually exist and have people working on stuff, with drilling plans, which puts them ahead of a lot of other sub-$10 million junior miners. Just remember, there’s a reason why the sidewalk in front of every convenience store is littered with old lottery tickets.

Kingsmen’s latest annual report is here if you want to dig any deeper. They have exploration plans for this year, but it looks like they spent a lot more on overhead and corporate services, related both to marketing the company to investors and to finalizing some of their options agreements in Mexico, than they did on actual mineral exploration in 2023, so it’s a little bit of a blank slate right now. As of December 31, they had about $1 million in cash — I would assume that’s not enough to cover all that much drilling, but I didn’t see any comments about their exploration budget for the year or about any planned future financing.

It looks like Kingsmen Resources also pays Gerardo Del Real’s company, Resource Stock Digest, to be on their “featured companies” list, and Del Real posted an interview with CEO Scott Emerson. This is their disclaimer info about that:

“Companies pay a sponsorship fee to be featured on Resource Stock Digest. That payment in no way entitles or ensures the company will be considered for inclusion in any premium newsletter published by Digest Publishing. We may use our sponsors at our discretion as the basis for promotional campaigns to grow our audience.”

What’s next?

“For Part Two of this trade, we’re positioning for big potential profits from the supercycle with copper….

“… don’t invest in EV stocks, instead, buy the companies making the EV boom possible in the first place.

“Those are copper miners.

“EVs require as much as four times the copper as internal combustion engines, and wind turbines and solar panels rely heavily on it too.

“There were 1.5 million new homes built last year in America and the total investment for manufacturing facility construction grew 143% from 2021.

“It may not seem like it at times, with high interest rates and an uncertain economy, but America is building more than ever…”

More from the ad:

“Resource legend Robert Friedland recently described the copper shortage as ‘heading for a train wreck.’

“His exact quote is… ‘My fear is that when push finally comes to shove copper can go up 10 times….’

“The current copper price is around $3.50 a pound today.

“Within 5 years, I see it hitting $9.00 per pound.”

Certainly lots of folks are expecting a copper shortage to really hit the market at some point, presumably over the next decade or so, because of the lack of major discoveries and the lack of investment in expanding copper production when prices were low for so long… and copper has already gotten well above $4/lb, so the interest is picking up.

Not sure how much Robert Friedland would actually fear that, he might delight in it, given that his company, Ivanhoe Mines (IVN.TO, IVPAF) controls one of the great copper projects (Kamua-Kakula in the DRC), but yes, everyone in the copper business thinks copper is going to go much higher.

Any clues about our secret stock?

“This company controls a metal-rich area with copper, gold, and silver, which is connected to a huge underground rock formation also rich in copper and gold.

“Impressive drilling results show a continuous area with valuable minerals that stretches nearly 4 miles in one direction and goes almost one mile deep underground.

“There’s $15 billion worth of copper at this location, which is incredibly valuable during this massive shortage.”

OK, that’s not super specific… anything else?

“The company is looking to expand both the quantity and quality of its reserves.

“It’s doing this by greenlighting exploration projects to the north and south of its property, meaning more copper can still be discovered, boosting the stock’s value further.

“And any day now, we could hear about a new discovery.

“This stock shot up 160% in a single month at one point….

“And yet, right now, it’s trading with a market cap that’s only giving it value for one tenth of the copper it’s found. Meaning it could rise 10X just based on the copper it has now.

“That’s without factoring in the millions of ounces of gold and silver it has also discovered. And without including future price increases for any of the metals.”

That could be a larger company, given the talk about a $15 billion resource value — no mining stock ever trades anywhere near the value of the metals we think are underground, but that’s still a lot of copper.

As to who it is? I’m at a loss, I’m afraid, not enough clues to hazard a decent guess… maybe it’s one of the other sponsored companies from Resource Stock Digest, maybe it’s a more advanced junior explorer that’s a bit larger. There are a lot of past-producing copper regions, even just in the US and Canada, and lots of tiny little companies trying to stake out or explore areas near the large mines in those regions. If you’d like to hazard a guess, feel free to jump right in with a comment below… the only copper junior that I’ve noticed Del Real teasing in the past was Abacus Mining (AME.V, ABCFF), and that was six or seven years ago (if you’re curious about that one, it was teeny and doubled in a couple months, whether because of the newsletter attention or because of actual news I don’t know, but shortly after that their main project got effectively rejected by the government because of the environmental impact, so it has been a terrible long-term performer if you didn’t sell during that spike, it’s now down 90% from when he pitched it).

And the last stock? Can we ID one more?

“The 3rd opportunity for 1,000% gains is a commodity with the best supply and demand fundamentals I’ve ever seen.

“Because it’s not just wanted by the world, it’s desperately needed.

“During the last supercycle, prices surged from $10 per pound to over $148.

OK, so even before he lets the cat out of the bag, we know that’s uranium. What else does he say?

“I see a repeat of uranium’s sharp rise happening during the current supercycle, and I want to be positioned for it.

“Cameco Corporation, the world’s largest publicly traded uranium company, traded for around $1.50 in the 1990s, during the early part of the last commodity supercycle.

“Near the cycle’s peak in 2007, Cameco traded to nearly $60 per share….

“Any disruption in the supply of uranium, such as geopolitical tensions in key producing regions, environmental issues, or underinvestment in mining infrastructure, can lead to a supply shortage and drive prices upwards.

“For all of these reasons and more, we consume close to 200 million pounds of uranium annually — yet we produce only around 135 million pounds.

“That’s a 65-million-pound structural deficit, which could grow to a 400-million-pound deficit as demand increases.”

And the clues about our specific stock?

“It’s a junior uranium exploration company looking to make the next big discovery in North America.

“Its mission is to generate exploration projects prime for making significant high-grade uranium discoveries in the Athabasca Basin region of Saskatchewan, Canada, the kind that substantially increase market caps.

“The company is in a great jurisdiction and has a flagship project along with seven other projects it will look to joint venture in order to mitigate future dilution.

“Its market cap is around $15 million right now, because we’re in the early stages…

“And it has several triggers lined up with multiple drill programs planned in 2024.”

Thinkolator sez: That’s very likely Cosa Resources (COSA.V, COSAF), which is also in the “featured companies” list at Resource Stock Digest — Cosa’s focus right now is the Ursa project in the eastern part of the Athabasca basin, and they should be drilling there right now and through the summer… and yes, they are also trading at a valuation close to US$15 million right now, and they do feature seven other named projects (Orion, Aurora, Astro, Helios, Orbit, Charcoal and Castor), a couple of which are getting some initial “prospect generation” exploration work… though there are a couple other prospects in their quiver beyond that, too.

So that fits the hints dropped for Del Real, and it also happens to be a roughly $15 million company, though it’s drifting down in share price of late, thanks in part to another financing… but their latest presentation says they have C$8 million in cash, so they can probably at least fund their planned drilling campaign — they finished the winter drilling last week, and will be drilling again in the summer.

And no, I don’t have any idea what those preliminary drilling results from last week might mean. The stock dropped on the day those results came out, from about 30 cents to 26 cents, roughly where it sits today (in US$), and the trading volume that day was fairly high (still less than $50K in trading), so investors were not immediately enthused.

There are a lot of uranium juniors coming out of the woodwork, following the first good year for uranium prices in ages, and that’s been a long-term boom and bust market for decades, with two real price spikes but otherwise a general decline, and with prices often well below the level that would be required to incentivize new mine construction.

And, of course, there aren’t many areas where you can explore for uranium without scaring the heck out of the local population, so most of the junior discoveries in exciting new areas have failed to get traction over the years — which makes the Athabasca Basin, North America’s big hard-rock uranium source (and the site of Cameco’s two big mines), the logical place to stake out claims and hope for a bull market.

Now the bull market is here, at least for now, and lots of those companies are looking for attention as they raise money and announce drilling results — probably the most well-known of the smaller survivors from past uranium bull markets are Fission Uranium (FCU.TO, FCUUF) and Skyharbour Resources (SYH.V, SYHBF), both of whom have been teased in the past and are much larger than Cosa (though neither is close to actually mining and generating revenue — Fission is in development for their PLS project, but even they say they are at least 5 years from potentially starting production, and miners are always hyper-optimistic about those timelines… Skyharbour has dozens of “drill-ready” prospects and has identified a flagship property they want to push, but is still really in exploration and drilling mode, years behind Fission), but if uranium prices stay lofty I’m sure we’ll hear from plenty more… and will see some smaller players bought up, most likely, which tends to elevate the prices of their peers.

Last Fall, for his less-expensive newsletter, Del Real touted enCore Energy (EU) and Uranium Energy Corp (UEC), if you’re looking for other names in the space. And enCore was the focus of his pitches pretty much all year in 2023, and has done pretty well to this point — both of those are ISR producers, not hard rock miners, so they have the potential to move to production far more quickly (ISR, which stands for In-Situ Recovery, is more like oil production than mining — force water through uranium-hosting rocks, pump that water up and remove the uranium). UEC is so promotional that it got me snared in a class-action lawsuit just for writing about the fact that Kent Moors was teasing the stock during the last uranium cycle, so I’m a little grumpy about that one.

In terms of actual production, there’s no very obvious uranium shortage, even if supply might not meet the expected demand in future years — uranium doesn’t have a real spot market, so it takes time for long-term contract pricing to go high enough to encourage increased production, and there are also strategic stockpiles that make the market somewhat unpredictable (like when Germany and Japan shut down their reactors after Fukushima, and their long-term uranium supply became available). If prices climb higher for real long-term contracts, Cameco and Areva can reopen mothballed projects and start producing more, too, but they’re probably a little hesitant to do so. Nuclear power is having a bit of a public renaissance now, as folks begin to embrace the idea that it’s the most viable climate-friendly option for meeting growing baseload power demands around the world, but we’re still not really adding to uranium demand in the United States, building new large nuclear reactors remains a non-starter in most Western countries for both cost and political reasons, and the long-promised small-modular reactors are not yet being fully embraced by anyone outside of the investing community. Personally, I dabbled in uranium speculation many years ago, when it seemed obvious to me that prices had to climb… but I was wrong, or at least several years early (which is the same thing as “wrong”, if you’re a speculator), and I’ve come to embrace the idea that I have no business trying to time the big cycles of the uranium market… if you want to do so, don’t let me stop you.

There are also now ETFs for uranium mining, Sprott Uranium Miners (URNM) and Sprott Junior Uranium Miners (URNJ), and the Sprott Uranium Trust (U.U.TO, SRUUF), which just holds physical uranium as a way to try to benefit from the rising (they hope) price of the stuff.

So there you have it, two very, very small junior mining explorers to chew on, hopeful beneficiaries of the next supercycle in gold or uranium prices, and a blank slate on which you’re welcome to project your favorite copper-focused junior.

Junior mining companies almost never succeed in actually building a mine, and they rarely even sell their projects to larger miners who will build them up and create an actual mine… but that’s not the point for Gerardo Del Real here, the point is that these are the most volatile kinds of stocks when resource companies get into a phase of manic trading, because of a broad “supercycle” or for whatever other reason, so they’re the place to look for wild trading gains.

And that does work sometimes, clearly — there are regularly little tiny junior miners who announce phenomenal high-grade drilling results, get everyone excited, and soar 10X in value. Just remember that there are more failures than successes in this space, and even the exciting movers are not usually wise “buy and hold” investments — in almost every case, those initial surges of excitement fade as investors begin to think about the fact that the “discovery” phase is really the only fun part… that drilling and exploring and proving up resources and reporting reserves takes FOREVER and costs quite a bit of money, and that if they get that far, the process of planning a mine and finding financing and getting permits and actually constructing some of the infrastructure takes a lot of the joy out of speculating on junior mining stocks, and often even the rare survivors, the companies who do move forward with building a mine a decade after they found the deposit, never again see the share price regain the peak of their early “discovery” years.

There are exceptions, of course, but mining is mostly a business for speculators and traders, not long-term investors. If you want to try to trade a potential wave of excitement in these kinds of companies, remember not to fall in love with them — you’ll probably want to sell at some point, just when you’re feeling brilliant for buying the stock, and that can be difficult.

Favorites you’d like to share? Possible solutions for that copper junior teased as #2? Let us know with a comment below… thanks for reading!

P.S. If you’re looking for the “20 million ounce mine” that’s owned by a $4 stock, as teased by Gerardo Del Real for his less expensive newsletter, that’s still the Stibnite Project in Idaho, owned by Perpetual Resources (PPTA), which he and his colleague Nick Hodge have been pitching for at least six years (it used to be called Midas Gold).  I last covered that story in August of 2023, and they have continued to make progress on permitting over the past eight months, as well as getting “indications” recently that they may be in line for a $1.8 billion construction loan from the Export-Import bank of the United States if they receive their final permits, along with some Department of Defense funding, given the strategic antimony production which will also come out of the gold mine, so the project is getting more real.  That has helped the stock surge since February, but you can get an indication of the long and arduous exploration and permitting process in the chart of that stock since we first covered a Nick Hodge teaser for it in 2018 (the purple line is the PPTA stock performance, the orange line is the gold price):

And that’s a junior miner for whom things have often gone pretty well, with regional political support, during a time when gold prices rose nicely.  Still a tough, tough business… we’ll see what happens if they actually get through the final permitting steps this year and get through to what they expect will be a construction decision sometime in 2025.  They say that could lead to commercial operations as soon as 2028.

Disclosure: I don’t own any of the companies mentioned above, and will not trade in any covered stock for at least three days after publication.