Which Tiny .70 Company Found the “Supernova Gold” Mother Lode?

By Travis Johnson, Stock Gumshoe, December 9, 2010

Those who’ve been with the Gumshoe for a while know that it’s tough to top Stansberry’s Phase 1 Investor for marketing that uses over-the-top hyperbole about tiny biotech and mining stocks, and creative names that obscure the truth behind their investments — that doesn’t seem to have changed much with the new(ish) guy at the helm, Frank Curzio, who has already pitched a couple “creatively named” ideas for mining and resource penny stocks (that being the “Thermogenic Oil (geothermal stocks)” and “Underwater Gold Sands (underwater mining)” teasers from the last six months or so).

And you also may know that this newsletter, which is their most expensive ($3,000 a year), usually focuses on microcap stocks — so I’ll forewarn you that whether or not this ends up being a stock that I like or you like, it’s so teensy and illiquid that the shares are likely to move just because I’m going to share the name with you (and, to be fair, because other folks are probably sniffing out this stock and trying to trade around the recommendation to get any “pop” that this teaser causes). Of course, if you rush out to try to trade off the typical pop that tiny stocks get from teasers (or even from me), this will probably be the time it doesn’t work. Stansberry’s ads are going to reach millions of people, but probably far more will read this Gumshoe article than will subscribe to a $3,000 newsletter, so … reader beware.

That said, despite the fact that I sometimes have some reluctance about sharing such illiquid and hard-to-trade ideas with the ever-growing great Gumshoe Faithful, I’ve gotten a huge number of questions about this specific one so I feel obligated to share the info I have — and I’m sure I can trust the mighty multitudes of Gumshoedom to make their own best choices with their money. I won’t share nearly as much information about this stock as Curzio will, I’m sure, but I can at least sift through his ad and share the name and some basic details with you so you can do your own research and decide for yourself whether or not you think it will make the 3,000% that Curzio teases.

Enough of my bloviating — you want answers, right? Let’s see who this “Supernova Gold” stock is …

If you haven’t seen the ad yet (or listened to it — and yes, that is really Frank Curzio’s voice reading the spiel), then here’s how it starts:

“A Long Time Ago, in a Galaxy Far Away…

“Supernova Gold”

..”.A star exploded, firing meteorite shrapnel toward Earth. It scattered in 5 major regions, on land and sea. Embedded in this space rock was an otherworldly element, which we call “Supernova Gold.” Over the centuries, it’s been used in everything from currencies to pharmaceuticals. Only today are scientists beginning to understand it on an atomic level… and unlock its amazing true potential.

“This summer, a tiny 70-cent company stumbled onto a piece of the original explosion, which may contain the “Supernova Gold” mother lode. According to our calculations, when they tap this deposit, shares could jump 3,233% or more…”

I don’t know how many cosmologists there are out there in Gumshoedom, but you may well already know that essentially every metal on earth came from the stars (just like folks do in supercolliders now, these heavier elements were formed by smashing lighter elements, like hydrogen and helium, together in the intense gravity of star formation), though there still seems to be plenty of discussion and debate about whether these heavier elements were formed by normal star activity or specifically from supernovas … and yes, this metal, which Curzio later tells us is Manganese, has its origins in the stars, and maybe in supernovas. I’m not a scientist, that’s just my basic understanding.

There’s quite a lot of manganese on earth — it’s not super-rare like platinum group metals, which are theorized to have been formed by asteroid or meteorite collision with earth — but most manganese is mined from South Africa, Gabon, China and Australia, and there are a relatively small number of places that produce appreciable amounts of the stuff. And it is valuable for lots of uses — Curzio notes that scientists are using nanoscience to make oil spill-cleaning “webs” using the unique properties of manganese, for one new development, and it is being used in newer variations of the batteries (faster recharging, longer lasting) that will be required for electric cars and other modern conveniences. So that’s part of the basis for the expectation that demand for manganese will explode in the future.

But as of today the vast, vast majority of manganese goes into the global steel industry, where it is used to alloy with steel and stainless steel (and also aluminum, though on a far smaller scale). It is not an investor-traded metal, and it’s not supremely valuable by the ounce like silver — from what I can see of prices it looks like manganese is roughly as valuable as zinc, or about a tenth the price (per ton) of nickel. Oh, and by the way: manganese is not just easily confused with magnesium for those who type too fast — if you read this article carefully, you’ll probably see somewhere that I made that mistake — it’s also almost exactly as valuable, you could theoretically buy either for a little less than $1.50 per pound … though they’d rather sell it by the ton or the shipload, I’m sure.

As Curzio notes in the tease, manganese has also historically been used as a coin metal, at least to some degree, and that use continues today. In the US, wartime nickels — which are still collected for their high silver content — are about 9% manganese, and the current dollar coins also include a manganese alloy. No one’s buying these for the magnesium, of course, the magnesium value of a wartime nickel is about a tenth of a cent and the silver therein is worth about $1.50. Just a curiosity.

But enough musing on magnesium from me — how about some more clues from Curzio about this particular miner?

“It’s hands down, the most exciting (and unusual) moneymaking opportunity of my career.

“You see, in a remote region of the globe – somewhere near the Strait of Malacca – a 70-cent mining stock has made an amazing discovery…

“They’ve found one of the world’s largest deposits of a metal we’re calling ‘Supernova Gold.'”