This teaser is going to get a lot of attention from Gumshoe readers, partly because Stansberry Phase 1 Investor teasers always get a lot of attention (they usually tease a small stock and they charge $5,000 for the newsletter, which gives them an aura of awesomeness — deserved or not), and partly because the pitch is for a near-term takeover of a mining stock … and folks who like to trade love takeovers that bring quick returns. And, of course, recent Gumshoe readers will note that the last time Phase 1 teased a gold stock, it took off nicely — that was a very different situation, but it still sticks in the mind.

This time around Frank Curzio (he edits Phase 1) is teasing a mining stock that owns a big chunk of land next to one of the highest-grade gold mines in the world, and that he thinks will be taken over by the huge mining stock that owns that high-grade mine. So who is it?

Well, they try to obscure in the ad — here’s how they put it:

“Urgent Gold Information From Our Multimillionaire Contact, ‘J’ …

“The situation I’ve just come across is urgent. So I’ll get right to the point.

“I’ve just received information from a very credible source in the gold industry.

“It concerns an event that, when set in motion, could occur in less than 24 hours. And to the right people, could be worth $100,000 or more.

“In short, it has to do with two gold companies, one of which you’ve almost certainly heard of.

“If this event occurs, it may be the single most profitable opportunity of the year in the gold industry.

“It could hand you the chance at a 100% gain. Practically overnight. And that’s a conservative estimate.”

This “J” that’s teased is apparently some muckety-muck in the gold biz who feeds good ideas to the Stansberry folks … here’s more on him:

“J has made a personal fortune in the gold markets on situations very similar to the one I’m about to show you.

“Please understand: I must conceal our contact’s name from you in this presentation…

“…Because revealing this information would allow too many folks to figure out the details of this opportunity. It could ruin the profit potential for our most serious subscribers….

“… this gentleman is one of the most prominent analysts in the gold industry. Dozens of the biggest money managers in America and Europe follow his analysis. He personally knows and meets with top mining executives and geologists… And gets invited to visit the most promising mines in North America….

“… the Financial Times has gone on record as saying: Anyone looking into gold stocks should pay attention to [J’s] opinions.”

It doesn’t necessarily help us much in our search to ID the pick, but I can tell you that the secret “J” here is almost certainly John Doody, who runs Gold Stock Analyst and has a marketing relationship with Stansberry & Associates.

But more importantly, what is this gold stock? They start to sprinkle in a few clues …

“In addition to J’s information, we’ve also uncovered 6 separate pieces of evidence that point to this event – with near certainty…

“As I said, the situation involves two gold companies.

“For the sake of simplicity (and because circumstances require that I keep a lot of this information secret)… I’m going to call the two firms ‘Big Gold’ and ‘Tiny Gold’.

“You’ve almost certainly heard of Big Gold.

Are you getting our free Daily Update
"reveal" emails? If not,
just click here...

“It’s one of the world’s largest gold producers, with 10 world-class mines operating across North and South America.

“Big Gold produces around 2.5 million ounces of gold… And generates nearly $2 BILLION in profits every single year.

“And unlike a lot of gold producers, Big Gold pays out hundreds of millions of dollars in dividends to shareholders every year.

“In other words, it’s one of the most stable and cash-rich companies in the gold industry.

“And just over the past few days, we’ve gathered reliable evidence that Big Gold might make a bid for a small gold operator… We’ll call it Tiny Gold.

We recommend you consider buying shares of Tiny Gold as soon as possible. This is potentially one of quickest gains you could see in your lifetime.”

So … “Tiny Gold” is the stock they’re recommending, but it’ll make it a bit easier if we first identify who the potential acquirer is (“Big Gold”). Let’s sniff out a few more of the “Big Gold” clues:

“In 2008, Big Gold made a bid for another small miner, operating right next to Tiny Gold’s property.

Why are they so interested in this area?

“Quite simply, it’s where Big Gold’s flagship mine is located. This gold-producing district is the single biggest source of revenue for the company every year.

“It’s a region I’m going to call the “Yellow Sea”. (As I said earlier, I must keep a lot of details secret. If too many folks figure it out by doing a simple Google search, this opportunity will be ruined.)”

Sorry, Frank — but you tease, we de-tease … it’s kind of our thing. More on “Big Gold” …

“Explorers have been interested in the area since the 1920s, when gold was first discovered here. But it wasn’t until the 1990s… when Big Gold acquired mining rights in this area… that it truly shot to fame.

“You see, using the latest technologies, the company discovered the Yellow Sea district has some of the richest, most concentrated gold veins in the world….

“Big Gold’s Yellow Sea property has, on average, 62 grams of gold per ton.”

That, along with the little slightly misleading diagram that they include of the “yellow sea” tells us that this “Big Gold” is almost certainly Goldcorp (GG), and their major producing mine is the Red Lake Mine in Canada (get it, “yellow sea” instead of “red lake”? Yes, super clever) … and yes, they have acquired other mines nearby, including the one teased as their 2008 acquisition (that was Gold Eagle, whose Bruce Channel/Cochenour discovery is near enough to be connected to the Red Lake complex by a proposed high speed tram). The High Grade Zone at Red Lake is responsible for much of Goldcorp’s annual production, and it does indeed have a high concentration of gold — two ounces per tonne, which is roughly the same as the teased 62 g/ton (there are about 31 grams in a troy ounce).

So who is this other landowner nearby that Goldcorp is supposedly going to offer to take over? Well, there are at least a couple explorers in the region … which makes sense, when there’s one huge mine in a region you always find little junior miners trying to sneak in to pick up any little scraps of leftover exploration acreage that might share the same geology.

How about a few more clues?

“Tiny Gold’s market cap is 35 times smaller than Big Gold. It’s among the smallest stocks we’ve recommended at S&A… You could buy it right now for just a few bucks a share.

“Tiny Gold’s mine is fully financed and 100% debt free. In other words, Big Gold won’t need to spend a penny to build a mine on the property.

“Big Gold’s head of mining operations just ‘defected’ to Tiny Gold. It’s a move that signals huge potential growth for Tiny Gold’s property… And direct interest from Big Gold’s executives.”

Ah. That’s getting closer to an answer for us … we toss it all into the Thinkolator, and out the other end comes our high-probability answer (I’m pretty sure it’s right, especially given the general confirmation of the location of the mine from the “Yellow Lake” diagrams in the ad): This is almost certainly Rubicon Minerals (RBY)

Which, you might notice, ain’t all that tiny — it’s small, sure, and a lot smaller than Goldcorp, but it’s close to being (and was until recently) a billion-dollar company. Tiny compared to Goldcorp, but downright enormous compared to most of the junior mining stocks we’ve seen teased by Phase 1 and others in the past, so absent a takeover or other “real” news we shouldn’t necessarily expect this one to make a really massive run like Gold Standard Ventures did after Curzio’s last gold teaser. It is about 35 times smaller than Goldcorp if you measure by market capitalization, just for confirmation.

Not that there’s necessarily anything wrong with being big — they’re big, after all, because they have a prime asset … and if you think the acquisition of Gold Eagle in 2008 was made on good terms, then it could well be that Rubicon is still undervalued (there’s a chart in the latest Rubicon presentation laying out the roughly comparable numbers from their own Phoenix project and the Goldcorp-acquired Bruce Channel discovery). I don’t know if the details are close enough to draw a direct comparison, or the stage of development similar enough, but there does seem to be some value here.

Part of the reason that this jumped out for the Phase 1 folks, I’m sure, is that the stock has gotten clobbered this year — I don’t know what investor expectations might have been for this year, or why the stock is falling (other than the fact that most gold explorers have fallen this year), but it is perhaps notable that Agnico-Eagle (AEM), which seems to have also provided some exploration support, recently told them that they’re selling a “significant portion” of their RBY holdings… and, as you might have guessed from the fact that they are teased as being “fully funded”, they did raise a lot of money recently that also helped to depress the share price (they raised $200 million at the end of February).

And, of course, they’re just entering the hugely expensive stage of operations — starting to actually build a mine, with still an optimistic projection that they can start producing gold in the fourth quarter of 2013 (whenever a miner says they’re going to start producing “late next year” you can guess that the best likely outcome is one wheelbarrow full of ore processed on December 31, 2013 … saying “late next year” just sounds better than “2014”). They do have the funding to get at least a lot of the development done, more than $200 million in cash and no debt, and they are advanced enough in their development and permitting (they say they have all the required permits now) that one would presume they’d have no trouble raising some more cash if they turn out to need it (assuming, of course, that the gold market doesn’t collapse).

Other reasons that confirm this ID? Well, Rubicon is now getting a new CEO from Goldcorp — Michael Lalonde, he was the guy who ran the Red Lake operations and Goldcorp’s underground mining projects, though I don’t know that his title was technically “head of mining operations.” And yes, I would guess that the job looked appealing to him because he knows the potential of the Red Lake district … but, of course, so would anyone else in the industry. Maybe he has a better perspective on it from running operations at the big Red Lake mine, or maybe he’s headed in there as his retirement project because he knows Goldcorp is going to want to take them over, I don’t know. He’s President and COO right now and will transition into the CEO job over the next few months, the current CEO is being bumped up to Chairman — it looks, from a glance at their bios, that they’ve basically brought in a “mining operations” guy to take over from the “raising money and exploring” guy, which makes sense at this stage of development.

I have no idea whether or not Goldcorp will try to take over Rubicon Minerals, but I’m quite certain that’s what’s being teased by Frank Curzio. I’m not a gold mining expert, but I will note that there’s also another large landholder in the neighborhood that’s a bit closer to the big Red Lake deposits — that’s Premier Gold Mines (PG in Toronto, PIRGF on the pink sheets), which already has a joint venture with Goldcorp to explore and/or develop the potential deposits along the tram route between the Bruce Channel/Cochenour mine area and the main Red Lake deposit. They look a bit interesting at first glance because they also have a couple other large potential deposits in Canada and Nevada, as well as a small portfolio of royalties that they’re planning to spin off as a separate company this year. Haven’t looked at the valuation in any great detail, but if you’re interested in Red Lake you might want to also sniff around Premier while you’re researching Rubicon (though since they’re already JV partners with Goldcorp, they’re probably not as likely to get a huge takeover bid for that project).

And of course, you can also always take a look at Goldcorp itself, which has a lovely portfolio of massive mines that are mostly in Mexico and Canada and has a pretty aggressive growth profile for a mega-miner (though one of their potential biggies is in Argentina, too, which worries some folks).

Given the beaten-down price, the fairly compelling takeover thesis, and the fact that the Stansberry folks might push this one pretty aggressively for a couple weeks, I’m willing to take a small speculation on this potential takeover — particularly because this happens to be an option-able stock in the US. So I’m ordering a small number of call options on this one right now, as I publish, and will promise, as usual, to hold that position for at least three days so I don’t trade off of any immediate impact our publication might have on the share price (any such impact is usually a lot smaller for billion-dollar companies, but it can still happen). This is, to be clear, the stupid gambler in me, not the sage investor (the two of them tend to fight it out a lot, frankly). I don’t write about my options trading very often and don’t specifically cover them in my portfolio notes for the Irregulars (mostly because I do a lot of dumb things in this vein, and I don’t trade options often), but since I’m mentioning this trade I will post a portfolio note if and when I decide to sell those options. As I told the Irregulars on Friday, my “sober” side — which, thankfully, gets to handle a lot more of my portfolio — is still very much convinced that the lower-risk royalty and streaming plays are the way to go for stock market gold exposure.

And now we can leave it for the rest of you — including many folks who know far more about mining than I do — to chime in. Is the decline in Rubicon Minerals a buying opportunity for a potential takeover from Goldcorp? Think Frank Curzio and John Doody have a good one going here? Or is there a good reason for the lower share price? Let us know what you think with a comment below.