Frank Curzio’s latest pitch for his pricey Phase 1 Investor newsletter has the Gumshoe faithful mighty, mighty curious… he gets us going with a little intro about how he was at an “invite only” meeting at the Plaza Hotel in New York that he said was about investing in Brazilian resources.
The lead-in to the piece is all about the famous and powerful people who were at that meeting — and we end up learning that what Curzio is pitching here is a company that’s been buying up resources in Brazil and “hoarding” those resources (ie, not throwing a lot of money into building mines just yet, but trying to buy up cheap assets waiting for folks to see value in gold resources “in the ground” again).
So we’ll get to explaining which company this is (we’ve covered it before, so it’s not a huge task for the Mighty, Mighty Thinkolator), but first let’s let Curzio set the stage for you a bit… because a big part of the argument he makes is that this stock is connected, with important backers.
“Ambassadors, foreign ministers, a consul-general, senators from both the U.S. and abroad…
“All rubbing elbows with private equity fund presidents, merchant bank chairmen, executives of the world’s largest commercial banks… even a few Ivy League professors.
“We had gathered there for an exclusive, invitation-only summit.
“On tap for discussion, among other things, were the details of potentially quite lucrative investments to be made in the gold-mining industry of Brazil.”
And then, apparently, it was in the “hallway” chatter that this “secret” gold stock came up:
“I was pulled aside for a private chat…
“Suddenly, I was standing in a circle with some of the most powerful men in Brazilian politics, including the man widely expected to be their next President, current Vice President Michel Temer.
“The topic of discussion?
“The future of one tiny gold stock in particular…
“Scarcely three years old, this tiny company is completely off the radar of most investors, including virtually everyone on Wall Street.
“But since its inception, it’s been quietly buying up some of the Para State’s richest gold mines… for pennies on the dollar.”
Some of you might already know what stock is being chattered about here — it’s got a lot of connections in newsletter-land… but we don’t want to spoil the surprise, so here are some more of the clues:
“It only went public a few years ago, and more than half of their shares are closely held by the executives, directors, and a few big, key players in the resource investing world.
“I caught wind of this situation about a couple months ago.
“During my research, I consulted with legendary resource investors like Doug Casey and Rick Rule, and was personally introduced to this tiny company’s founder, who Rick praises as ‘one of the most formidable mining entrepreneurs on the planet under 40.'”
And he describes “hoarding” thusly, in comparing the potential of this stock to Yamana Gold (AUY) or Lumina Copper, which we’re told grew into a multi-billion dollar companies by buying up unwanted assets in the early 2000s, when gold and copper were cheap:
“… a firm engages in “resource hoarding” by raising money during the down times in a commodity cycle and buying up as much of a particular resource as they can at bargain basement prices.”
Then we move on to some more clues about the “connected” folks involved with this company:
“The people at the highest levels of management are among the most connected — and successful — in the business.Are you getting our free Daily Update
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“For example, one of their Directors, and biggest investors, is a man I’ll call M.G.
“You might not recognize his name if I told you, but in Brazil, his name is like the Kennedy name is here — everyone has heard it….
“… it was M.G. that organized our meeting in Manhattan, and personally invited everyone in attendance.
“And I sat there in amazement as each and every one of them, from former Lehman Brothers CEO Dick Fuld, to former Senator Christopher Dodd, came over to shake his hand.”
And some other insiders are hinted at:
“One advisor was the former Minister of Regional Politics in the Brazilian cabinet.
• Another was the exploration manager for Kinross Gold in Brazil — where he oversaw the expansion of the country’s largest gold mine.
• One of their Directors is the former Canadian Minister of Natural Resources.
• Their CEO was the Head of Exploration for BHP Billiton, the world’s largest mining company.”
And the founder:
“… the founder of this firm is making a name for himself doing exactly this type of thing — forming a company, getting it off the ground, and making his shareholders rich.
“Back in 2005, he formed an energy-exploration company that went from early-stage asset acquisition to full-on production by 2010.
“After the stock market bottomed in 2009, you could have bought shares for as little as 60 cents. By the beginning of March, 2011, shares had soared to $6.00.”
And the bit of chatter from the secret hallway meeting that got Curzio heated up:
“… during that private meeting in the hallway of the Plaza Hotel, the Vice President of Brazil practically gave the ‘keys to the country’ to this tiny gold firm.
“‘Whatever you need, whatever you need,’ he said over and over again as the founder of this company explained his agenda.”
And finally, after we’ve been inundated with the chatter about how connected this company is, we get a little bit of detail (or as we say here at Gumshoe HQ, “clues”) about the company’s actual business:
“Using their extensive contacts, this company has already accumulated nearly 4 million ounces of gold in the ground….
“The biggest coup happened just at the end of last year… when this tiny firm acquired a gold-mining outfit that had fallen on hard times due to plummeting gold prices.
“From around $1 in the summer of 2011, this gold miner’s share price had fallen to 10 cents. Its market cap had been slashed f