Untold millions of readers (OK, not millions — in the tradition of the folks we write about every day, we’ll use quotes that enable us to make stuff up … so, untold “millions”) have been asking us about the “long-lost” treasure maps that are chatted up in Sean Broderick’s latest teaser for his Red-Hot Global Resources newsletter.
So, I don’t know that it will do you much good today (the stock has already gone up quickly since this version of the ad started a week ago), but I can’t just go and leave a pile of questions unanswered … that’s not the Gumshoe Way.
And according to the version of the ad I just checked online (you can see it here if you want), there’s still plenty of time to get filthy rich — here’s what they sez:
“HURRY! This stock is already beginning to move higher! Send for your FREE field report TODAY!”
Right, so I’ll be right quick. Of course, they also preface this by saying it’s “Very Hush-Hush.”
To which I can only respond, “pish-tosh.”
Like so many mining miracle stories, this one goes back hundreds of years and sports several photos of your intrepid editor wearing a hard hat. Here’s the intro:
“383-year-old maps have led modern-day geologists to more than 2,000 ancient Spanish mines that STILL boast some of the richest silver ore on the planet …
“Now, thanks to this discovery, a tiny, $1.50-per-share miner is about to announce one of the 21st Century’s richest silver strikes.”
And the story goes back further than those 383-year-old maps, Broderick even weaves in that friend and hero to native peoples everywhere, Hernan Cortes, liberator of Cuba and bringer of full employment to central Mexico. Not paid employment, of course, but still, he and his slaves found a mess of silver.
Then the story starts to get modern, and we hear that many of these super-productive mines were shut down after the Mexican Revolution (about 100 years ago), and that the mines that produced for years before that were so fat with silver that the workers ignored all but the very easiest silver veins, and there’s tons of silver left in them thar hills.
Some more from the ad:
“For the rest of the 20th Century, Cortés’ silver was virtually forgotten. The mines and the refining plants were left deserted until 2006, when a virtually unknown Canadian mining company quietly acquired nearly 400 square miles of the richest mining land in this region on the cheap …
“And quickly found that the silver ore that had been discarded centuries ago is unbelievably rich by today’s standards.
“According to the company’s geologist:
‘They (the Spaniards) were mining grades of 1 kilo of silver per ton of ore and above. They left the 500-gram-per ton silver behind.’
“The great news is, thanks to modern mining techniques …
“Veins like these that contain 500 grams of silver per ton of ore are considered to be remarkably rich in today’s world!”
So that’s the basic pitch — and yes, you guessed it, the stock we’re being teased about is that “virtually unknown Canadian mining company.” It often seems that if we ever run out of unknown Canadian mining companies, I’m afraid the newsletter industry might collapse.
And the second part of the value of this company, we’re told — their “secret sauce” — is that they have access to a private collection of ancient maps that show 2,000 old abandoned mines … so they can go to those old mines, sample the tailings and do some drilling, and quickly find more profitable ore to dig up.
To his credit, Broderick doesn’t promise this one as a mega-grower — there is the “astonishing secret,” of course, and he does tell us it should go up by 276%, and that he thinks it should turn into a $5 stock “pretty quickly” and $25 “over time,” in part because he says that the silver and other metals they’ve already discovered are valued at $357 million and come from less than a third of the land holdings, all while the company market cap is far smaller.
And yes, of course miners are almost always valued at a small fraction of the potential worth of the reserves and resources they own under the ground — which, considering the risk and expense of turning drill results and resources into bars of silver or gold, makes perfect sense. I don’t know if trading for 5X their identified resources is a fair number, but it will almost always be some kind of multiple.