Solving Frank Curzio’s “The NEXT Royal Gold” Teaser

Sniffing out the latest Phase 1 Investor tease

By Travis Johnson, Stock Gumshoe, October 9, 2012

“The last time this happened, early investors had an opportunity to make a fortune. Now one team of researchers thinks it’s happening again… with an unusual, little-known mining stock.”

That’s the opening of the latest teaser from Frank Curzio for his Phase 1 Investor newsletter, and it’s not the first time we’ve heard the promise of the “next Royal Gold” — which makes sense, since the royalty business they’re in is still fairly new to the public markets, and it has been so incredibly successful for them as they’ve grown from a weak mining “penny stock” into a near-$100/share royalty collossus over two decades.

The companies that I remember hearing pitched as the “next Royal Gold” over the years have been Virginia Mines (VGQ in Canada, VGMNF on the pink sheets), International Royalty (later bought by Royal Gold), and, more recently, Sandstorm Gold (SAND). And the list of gold royalty companies is a short one, though there are other up-and-coming companies trying to build businesses in this area.

But this time Curzio has something else in mind — I suspect that his Phase 1 is probably still recommending Sandstorm Gold, which is my largest holding and an old favorite around these parts, though it had had 25% drops since he first touted it so he may have been stopped out, but it’s not the one he’s teasing today, and neither is Virginia Mines … so this must be something new.

As is typical of Phase 1 pitches, he says they’ll be having a conference call for subscribers, and as they often do they’ve gotten the CEO of the company to participate in this call, which will take place on October 11, and he shares a few more clues that we’ll use to sniff out the name of the company for you … but first, let’s get his spiel for why you would want to buy the “next Royal Gold.”

“A Way to ‘Cash in’ On Large Mining Discoveries — BEFORE they’re Discovered

“… everyone knows you can make a ridiculous amount of money investing in small mining stocks…

“Throw money into the right exploration company just before it makes a huge discovery, and BAM! Just like that, you can make a killing overnight.

“When Afriore Ltd discovered platinum in South Africa, its share price jumped 1,952%.

“When Silvercorp Metals discovered silver in China, its stock spiked 3,710%.

“The problem is… for every thousand exploration projects underway, maybe one results in a big discovery…

“I don’t know about you, but those odds don’t seem too appealing to me.

“They didn’t seem too appealing to Stan Dempsey either. So he found a way to change the game—to stack the odds in his favor.

“Instead of going ‘all in’ on low-probability exploration projects, Dempsey decided to spread his capital across a variety of projects…

“Here’s one example of what I mean—the ‘deal’ that changed the game for Royal Gold…

“In 1991, Dempsey invested one million dollars with Placer Dome and ECM