Frank Curzio’s “Gold Fracking” — Sniffing out his “Aboveground Miners”

Friday File look at a teaser from Curzio's Small Stock Specialist

By Travis Johnson, Stock Gumshoe, April 13, 2012

I’ve been blathering about my own investments in these Friday Files for a couple weeks now, but for today we’re going back to sniffing out teaser picks … in this case, a teaser pick for “Gold Fracking” that Frank Curzio has been sending out pretty aggressively for a couple days in pitches for his Small Stock Specialist, and that’s getting Gumshoe readers into a bit of a lather.

Frank Curzio’s latest ad uses the time-honored approach of making up a new term to shroud his idea in secrecy — in this case, he uses the term “gold fracking” to entice readers, though of course the pitch has nothing to do with the hydraulic fracturing that’s led to the US boom in oil and gas production.

No, what Curzio’s teasing with his “gold fracking” (and he does eventually reveal this, though it’s not until about halfway through the letter) is precious metals recycling, particularly of extracting gold, silver, platinum and the like from the massive stockpiles of electronic waste that pile up every day from our discarded laptops, cell phones, etc.

And while this isn’t exactly a topic for daily conversation, neither is it completely unknown — there are a lot of companies trying to process that electronic waste, and other waste products that include valuable materials even in very small quantities (like the platinum in your catalytic converter) … heck, even the shady “cash for gold” folks have in some cases gotten in on the act, trying to buy up old industrial waste (cartons of old electronic circuitry, etc.) on the cheap so they can have those refined for their gold and silver content.

And yes, “finding” gold in recyclable materials is far easier, in many cases, than finding it underground and extracting it from rock — here’s a little taste of Curzio’s pitch on that point:

“… one tiny group of companies claim to have found a way to find massive amounts of bullion – without using a single drill, pick or shovel.

“The strange thing is…

“They also don’t employ any geologists…

“They’ve never even requested a mining permit.

“And yet, according to the U.S. Government Geological Survey, they’ve managed to find more gold – right here in America – than many of the world’s biggest mining companies, combined.

“When I first heard about this, I was skeptical.

“How could a group of companies a fraction of the size of Goldcorp or Newmont… with no exploratory team… find as much as 40x to 800x MORE gold per ton than anyone else?”

And some specifics to make the comparison between this “gold fracking” and actual gold mining …

“Government audits of this unusual ore have found that the concentration could be 40 to 800 times greater.

“That’s around 40 to 120 grams of gold per ton of ore… Up to 17 times more productive than even the top gold mines in the world!

“In fact, the highest-grade sample they’ve seen so far has been 1,500 grams per ton – more than 200 times richer than the world’s most productive mines.”

Most of this stuff has been known for quite a long time, though it’s getting a bit more attention with gold at $1,700 an ounce than it did a decade ago when gold was under $400 an ounce — which is probably good, because the increasing miniaturization of the electronic world is undoubtedly making it harder to extract gold from circuit boards and the like than it was back in 2001 when the USGS published this fact sheet about electronics recycling. Recycling of platinum group metals has climbed dramatically in recent years, but that’s almost all from catalytic converters — not surprising, since that’s also where the vast majority of the world’s platinum, palladium and rhodium supply are used in any given year, and automobiles have been a core part of the steel recycling chain for decades, anyway, so there’s a sort of “supply chain” for recycling the various components of junked cars in place.

But anyway, that’s the basic pitch — that the “special ore” (recycled electronics, etc.) that Curzio teases is far richer than the ore that mining companies dig out of the ground.

And, more than that, that these “gold fracking” companies are going to get a double boost — not just the boost of high precious metals prices, but also a boost from increasing regulatory pressure to recycle electronic waste, which will increase their input of “ore.”

Here’s some more of the tease:

“The tiny handful of companies we’ve identified have been quietly awaiting a lan