“Trump’s Gold” from Stansberry’s Investment Advisory

by Travis Johnson, Stock Gumshoe | January 20, 2017 1:12 pm

A Quick Check of Stansberry's ad: "Will Trump Open Development of the World's Biggest Gold Mine... Right here in America?"

This is getting a little ridiculous.

I don’t think I’ve ever seen a single mining stock as aggressively endorsed by investment newsletters as Northern Dynasty has been over the past few months. So this is just a short note to let you know that, yes, you can add another one to the pile — it’s not brand new, Porter Stansberry[1] has been sending out this ad for at least a week or so now, and it’s dated January 3, but a recent ad for his Stansberry’s Investment Advisory is pitching Northern Dynasty as “Trump’s Gold.”

The argument is functionally identical to the arguments that have been made in favor of Northern Dynasty Minerals (NAK, NDM in Toronto) by many others over the past several months — that the EPA overstepped its authority by blocking the permitting process for the Pebble Mine, which by many estimates would be the largest gold[2] and copper[3] mine in the world if it is built, and that the EPA is going to back off or lose in court.

The argument was reasonably compelling back in the Summer and Fall, when it looked like there would be movement in the court case (Northern Dynasty sued the EPA), with both sides agreeing to mediation… and it became more compelling after Trump’s surprise election victory, mostly because Northern Dynasty said they had met with Trump’s nominee for the head of the EPA and because candidate Trump pretty consistently talked about rolling back environmental regulations, which was widely interpreted as opening up the floodgates for new mine development (or, at least, for letting Northern Dynasty proceed with the permitting process to see if the mine can be safely built without undue risk to Bristol Bay and the large salmon fishery there).

That’s why I have a position in Northern Dynasty through some derivatives[4], mostly long-term warrants[5] — I think there’s a reasonable chance that the permitting will be allowed to proceed, either because of executive action or because Northern Dynasty wins in the courts over the next 6-9 months, and the absolutely massive size of the mine means that there’s a chance for large gains if the odds of this becoming a real project again improve in a dramatic way because of regulatory or legal action.

There’s still a risk, of course, that the mine won’t be built (or even released from purgatory so it can go through the permitting process) — and whether the probability of that happening is 10% or 90% or somewhere in between, it’s important to note that if the Pebble Mine can’t eventually get permitted and built (as was the widespread assumption until just a few months ago), the stock is essentially worthless. The huge size of the mine makes it a reasonable risk-reward speculation for me, but I think of it like a spin of the roulette wheel… you know that you’ll win big if they ball lands on black, but you’re not sure whether there’s one black square or 20 black squares on the wheel, and landing on red means your money is gone.

Many people have much, much more conviction than I do that the mine will be permitted and that President Trump will call off the EPA’s lawsuit within moments of taking office, which would give you perhaps more certainty that there are a lot more black squares on that roulette wheel than there are red ones, but remember: newsletter editors don’t get bigger and more successful by being human and uncertain, they thrive by having strong and certain views and positions and opinions that get a lot of attention (Doug Casey[6] hinted that this will be “Executive Order 0001”, after having previously talked about this as his biggest speculation in early November[7], and Marin Katusa[8], who also says he has personally invested heavily in Northern Dynasty, has spoken several times over the past year about his certainty that the mine will be built, just to give a couple examples — and yes, Katusa used to work for Doug Casey[9], which stopped when Casey sold his publishing business to… Porter Stansberry. Everyone’s interrelated in the newsletter world, time for a game of “six degrees of Bill Bonner[10]”).

So that’s the story — “Trump’s Gold” is, of course, Northern Dynasty yet again… and it’s getting both newsletter and mainstream media attention (including this piece in Bloomberg[11] yesterday). It’s still a far-from-production gold and copper mine, still is not allowed to enter the permitting process, and still is certainly a speculation — but a lot of its fate does rest in the hands of the new President and his Environmental Protection Agency appointees, and it could be, if allowed to proceed, the biggest mine in the world. I’ve laid my chips on the table, and will wait to see what happens.

It’s also worth noting that the huge volume of attention piled on Northern Dynasty because of the expectation that President Trump will do something to help them move forward has led not just to a much higher stock price (NAK has jumped almost 500% in six months, and almost 200% just since the election), but also to much higher expectations — including some folks who probably take literally the newsletter promises that President Trump will effectively send the Pebble Mine into permitting on day one (which is today, in case you haven’t noticed). If we assume that things don’t usually move that fast or that certainly when it comes to politics, we should also anticipate that perhaps those who were betting on a “day one” move to help Northern Dynasty could be disappointed and sell if progress is slower than that.

Disclosure: I personally have long exposure to Northern Dynasty Minerals through derivatives (options[12] and warrants), as I’ve noted when covering other teasers for this stock over the past few months (I haven’t sold any yet). I will not trade in those positions or in the stock of the company for at least one week following publication of this note (usually the blackout period is three days, but I often extend it for volatile or illiquid securities).

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Endnotes:
  1. Porter Stansberry: https://www.stockgumshoe.com/tag/porter-stansberry/
  2. gold: https://www.stockgumshoe.com/tag/gold/
  3. copper: https://www.stockgumshoe.com/tag/copper/
  4. derivatives: https://www.stockgumshoe.com/tag/derivatives/
  5. warrants: https://www.stockgumshoe.com/tag/warrants/
  6. Doug Casey: http://www.stockgumshoe.com/reviews/the-casey-report/trumps-executive-order-0001-teased-by-the-casey-report/
  7. his biggest speculation in early November: http://www.stockgumshoe.com/reviews/the-casey-report/friday-file-quick-look-at-doug-caseys-biggest-bet-and-golds-three-catalysts/
  8. Marin Katusa: https://www.stockgumshoe.com/tag/marin-katusa/
  9. Doug Casey: https://www.stockgumshoe.com/tag/doug-casey/
  10. Bill Bonner: https://www.stockgumshoe.com/tag/bill-bonner/
  11. this piece in Bloomberg: https://www.bloomberg.com/news/articles/2017-01-19/trump-makes-canadian-mine-explorer-with-zero-revenue-great-again
  12. options: https://www.stockgumshoe.com/tag/options/

Source URL: https://www.stockgumshoe.com/reviews/porter-stansberrys-investment-advisory/trumps-gold-from-stansberrys-investment-advisory/


47 responses to ““Trump’s Gold” from Stansberry’s Investment Advisory”

  1. tonybocc says:

    “the expectation that President Trump will do something to help them move forward has led not just to a much higher stock price , but also to much higher expectations”

    Riding the wave until we get closer to March, then I’m going to reevaluate.

  2. JDV1956 says:

    NAK is trading at 52 week high, after trading on news and hype…will it actually take off? from here… I am not betting on it, as the entire region of this “potential find” is totally against any mining. That said the stock will probably move higher if the permitting process is granted…but NAK is a lonnng way from actually getting any type of ore out of the ground…I’ll sit on the sidelines and watch

  3. thinairmony says:

    Stocks are like lending money. If you lend it don’t ex speck it back. Save’s a lot of anger and heart ache. Old Proverb. DAK is at $2.65 2:00 PM ET. I know you mentioned warrants once. I’m going to look at that and see how they work.

  4. mseager says:

    New subscriber here, I’m loving this site Travis and Dr. KSS, your articles are so awesome and the comments are great too. I bought a small position in NAK after your previous article on Navellier’s newsletter. It’s up 10% since then, so happy to ride the wave and see where it lands.

  5. jyoung0071 says:

    What are symbols for the warrants, exp dates and strike prices?

  6. Karl says:

    My first stock to go +100%! I saw 112% today. Good to learn more about what’s driving the price up and what could kill it.

  7. MCGILTON98846 says:

    I think not on (NAK) too much risk,with out real action.I did get some (SAND)SandstormGold though .Thanks Travis for that rep ort .Ihave ben watching (FNV) and (SLW)in a streamer stock,SAND fit in perfict for me .Please read threw my typing ,I only started on the computer two years ago when I retired after 32 years working as a prion guard.Thanks again for all of the great information. Groundhog

  8. Jason says:

    The locals voted against this project by a wide margin (statewide). If they try to go ahead with this anyway as was rumored way before the presidential election, then there may be big trouble ahead. Also it is a fact that after the election, donations to prominent environmental groups soared to all time highs and guess where a lot of that cash was headed

  9. Karen says:

    After seeing Trump Champagne being sold off the counter at my local packy, think I’ll sit this one out. It’s all hype, imo.

  10. Link Quist says:

    I liked NAK below $2, but then again, if Trump does audit the FED and return us to a Gold Standard, then it is GAME ON for just about every Miner… I find more value in First Mining Finance at the moment, as it is trading at about $.64/share, but given the TOTAL SIZE of NAK, it is cheaper than Continentals’ (CGOOF) Buritica (~$3.40 but Fully Permitted), Lundin’s (FTMNF) Fruta del Norte (~$4.25 also Fully Permitted), NovaGolds’ (NG) behemoth Donlin, which is partially owned by Barrick, the KSM owned by Seabridge (SA) which is absolutely enormous with 75M oz Au, 440M oz Ag, and over 10Bn lbs of Copper trading for $9.60-Also Fully Permitted), Pretium (PVG)s Brucejack and Snowden (Trading now just OVER $10 and THE BEST BET w/$12 Calls expiring in June IMHO, which have total resources of over 51M oz Au, 240M oz Ag, and ~6.6Bn Lbs Copper AND is not only fully permitted, BUT WILL BEGIN FIRST POUR in Q1 This Year with RECORD LOW AISC, and Nevsun (NSU)’s recent acquisition of Reservoir Minerals.

    Also really like the miners which will be bought out, for example Almaden, Auryn, Alacer Gold, Atlantic Gold, Barkerville, BTG, Gold Standard Ventures, Silver Lakes, Silver Bear, Midas Gold, Lexam VG, Mirasol Resources, Marianna Resources, Falco Resources, Integra Gold, Dalradian, Gowest Gold, Vista Gold, Minco Silver, Avino Gold and Silver, Sabina Gold and Silver, Alamos Warrants for JUNE 2017, Golden Minerals, Golden Arrow, Golden Reign, Golden Star, Golden Predator, Pure Gold, White Gold, Colorado Resources, Treasury Metals, Gran Columbia, and Optionality plays like Exeter, Jaguar, DRD, Chesapeake Resources, and Tower Hill…

    How much bigger is Pebble Beach than Seabridge’s KSM?

  11. I owned shares in Northern Dynasty in its early stages and sold it at a good profit years ago when it became evident that permitting was going to be a problem. For several months now it has been appearing on my CIBC Alerts for both daily percentage increase and volume increases which at this point is definitely still speculation, so somebody is accumulating a lot of shares in anticipation of permitting finally being able to proceed. I bought in again last week, maybe I should have done so earlier, but I consider it a reasonable gamble because Trump’s inauguration has a high probability of changing the dynamics of the situation. Not necessarily a slam dunk, but a reasonable hypothesis that potentially billions of dollars waiting to be harvested and thousands of jobs created will carry the day however long it takes to actually implement. The potential for a price decline if Trump does not act quickly enough to suit fickle investors just looking for a quick profit is very real, but I am confident ways to develop a project of such enormous economic potential will be implemented by the new administration. As Travis noted, a 500% increase in 6 months and 200% just since the election makes this a well rewarded speculation for risk takers willing to take a positive view of the unfolding situation, and YES I am already up nicely even though I waited until the inauguration was imminent. Will probably buy more when the actual executive order is made public, whether it takes a few days, weeks or even months. No matter what happens I expect precious metals prices to rise whether Trump follows through on his “draining the swamp” rhetoric or not. If he fails to act, or borrows so much it sends the national debt skyrocketing, precious metals prices will rise as more and more people lose faith in fiat currencies and look for a safe haven to preserve their wealth.

  12. Marc Pearsall says:

    I have made several hundred percent on my NDK shares so far and have sold 1/2 my position, so I am sitting on ‘house shares’ now. That said, this mine will probably not go into production for at least 5 years, even if it’s permitted on Monday. I think this is a stock that you ‘buy the rumour, sell the fact’, which I will be doing soon after permitting. Northern Dynasty been a fun ride, and as another post mentioned already, lots of other junior mining stocks are good for 10 baggers from here.

  13. A. B. says:

    I really enjoy this website, and thank you to the Gumshoe for making it work.
    As for the mine in Bristol Bay, while I am a big fan of gold/silver as counters to the sloppy fiat currencies, I am firmly opposed to wrecking this extraordinary part of Alaska with a filthy mine. I am sending a substantial part of my stock market winnings to the most vigorous environmental groups who will tie up this wretched mine in court until the whole project folds up like a cheap lawn chair.
    Playing the stock market is one thing, but ruining the precious places on earth for some money is absolutely
    disgusting.

  14. Jason says:

    Isn’t this actually a Canadian company? They don’t give a rats —- about the U.S and may have already signed a contract with China to buy all the gold and that would be treason

  15. Andrew says:

    Great info Travis, looks like the horse has bolted, been on quiet a run, dividend paying miners are not easy to find http://eqibeat.com/top-20-global-mining-stocks-by-dividend-yield/

  16. rainsonme says:

    several small points. And I sincerely intend no offense; if I say something rude, I did not mean it.
    1. I invest for money; its capitalism; its greed. I own MO, although I abhor cigarettes and discourage every smoker I know. If NAK pops with a barbarian in charge of EPA, my advice would be to buy NAK, make money on it, and donate that money to whatever environmental cause has the most impact.
    2. The US will not be returning to the gold standard; it is not realistic; currency is rapidly moving the other direction into electronic abstratctions of an abstraction of an abstraction of something physical.
    3. Trump is a populist. He wants soft money. WJ Bryant “free silver”, dont crucify mankind on a cross of gold. Trump has told you over and over again he likes debt, he is comfortable with high leverage and big debt. Trump will weaken the dollar dramatically as part of his re-invigorate US exports along with all the infrastructure and military spending.
    4. I am not sure the commodity waterfall crash is truly ended, but it does seem like a combination of reduced regulations, continued low energy costs, and a promise of increased manufacturing should boost commodity prices and miners. I hold SAND, RGLD, and NAK. I will look at the guest post more closely, looking for some miners.

  17. alaska51 says:

    I am a commercial fisherman in Alaska for the past 40 years. The Pebble Mine will never be allowed. It can/will have a potentially devastati8ng impact on the biggest Sockeye salmon run in the world. Don’t waste your time and money. It ain’t gonna happen-ever.

  18. hendrixnuzzles says:

    NAK…one thing Trump cannot do is create an economically viable gold deposit.

    Can someone please show any evidence that all the gold there can be mined economically, even if the permitting is eventually completed ?

  19. carlosrivers says:

    its pulling back a bit here. Anybody know what Stansberry’s venture small cap stocks are from todays tease webcast? He claims 1) the next mcdonalds small cap. 2) a property damage insurance co business in a state in the richest part of the country making massive growth revenue gains.
    He wanted 5999.00 for three stock picks which includes a lifetime subscription. His newsletters are getting kind of pricey. don’t know who would pay that much.

  20. galtgulch says:

    President Biden is quoted on the subject of the NAK mine saying that from his point of view Alaska is not a place for a mine with his typical know it all attitude and condescending tone.
    The fact that former President Trump was in favor of the mine being permitted to pursue the permits is reason enough to expect the President Biden will not yield on this.

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