The intro from today’s teaser ad sounds pretty similar to lots of other ads we’ve seen with a commodity or gold focus…
“URGENT INVESTMENT ALERT:
“Miss this chance to buy these resource stocks now, while they’re dirt cheap, and you’ll regret it for years…
“Three ‘Bounce-Back Mining Belters’ to Buy NOW”
But today the big promises are coming not from one of our typical newsletter publisher foils, but from Down Under — this is an ad for Resource Speculator, which is a mining and energy-focused entry-level newsletter in the Australian market.
So the stocks they’re teasing are probably listed on the Australian Stock Exchange, though sometimes such stocks are also available to be traded either as ADRs or OTC in the US… so let’s see what he’s pitching.
There are three stocks to identify today, so we won’t get too much into the “big picture” claims — it basically mimics any other natural resources newsletter you might be familiar with: gold is soaring, natural resources are priced below what it costs to produce them, we’re near the bottom for mining and energy stocks, and we’ll all get rich when the prices inevitably rise. It may or may not be accurate, but it’s familiar.
So we’ll get right into the individual stocks — and unlike some natural resources newsletters these days, who are hiding in gold and scared (perhaps rightly so) of base metals and energy, these aren’t just gold stocks. Here’s what we get about the first one by way of clues for the Thinkolator:
“Bounce-Back Belter #1
“1.66 million tonnes of nickel in the middle of the South Pacific…and this ASX digger is about to claim every scrap of it for themselves!
“This is my favourite speculative resource stock story on my buy list right now.
“This company has uncovered a major nickel deposit in the Pacific…and you can buy in today for under 13 cents.
“If I’m right, you could see this stock bounce-back in a big way over the next 18–24 months.
“And I mean BIG. According to my analysis, shares could be swapping hands for nearly $2.00. That’s a potential 13-fold gain in the months ahead.”
So what is this major nickel deposit? More clues…
“The firm I’d like to show you is on track to break ground on what could be an enormous nickel reserve in the Solomon Islands.
“This deposit is rich, shallow, and big. Historical drill results by Kaiser Engineers show as much as 1.66 million tonnes of high-grade nickel buried just metres below ground.
“That’s by FAR the biggest nickel resource in the Pacific and — all going well — may be among the largest nickel deposits on the planet!”
And apparently there’s been some fighting or controversy regarding the deposit… here are some more hints:
“In March, after working on the lease for more than five years, they ended a long-running court battle with a Japanese outfit vying for the right to mine this nickel deposit. Subsequently, the Solomon Islands government ruled the Japanese state-owned firm didn’t have rights to the lease.
“A decision that leaves this ASX-listed miner as the favoured company with a claim on this multi-million tonne nickel mine.
“I’m convinced the Solomon Islands government will give them the go-ahead to begin mining this area very soon.Are you getting our free Daily Update
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“If they get the green light, you could see shares jump 50% within seconds…then DOUBLE inside a couple days….
“Of course, there’s still a chance the lease won’t be granted, in which case the share price could fall.
“But if they’re awarded the lease — and I’m convinced they will be — you could see the stock price soar 13 times over by 2018.”
This is Axiom Mining (AVQ.AX, AXNNF OTC in the US — extremely illiquid in the US, so be careful… the stock is volatile, and even if you can buy it OTC in the US for close to the fair value set in the Aussie market, it may not be possible to sell an OTC position at a reasonable price in the future… buying illiquid stocks is far, far easier than selling them).
Axiom got one of those “why is your stock going up so fast?” notices from the Australian regulators last week, which might have had something to do with newsletter attention but is probably mostly speculation on that pending decision from the Solomon Islands. This is what they said in response to the query:
“The Company expects official information from the Solomon Islands Government shortly as to the process and/or repermitting of the Kolosori tenement on Isabel Island.
“The Company continues to work with it current strategic partners as to the development of the Isabel Nickel Deposits which includes the San Jorge tenement and other potential development partners and during the normal course of business it continues discussions with other potential development partners.
“There has also been political and media speculation that with the new government in the Philippines, it may introduce a ban on the shipping of nickel ore, further limiting the supply available to China, the world’s largest consumer of nickel ore.”
I’ve never heard of this one, and haven’t looked into the background of this dispute over the Isabel nickel project, but there’s an article here that provides part of the story, and Axiom’s website gives some of the history as well.
So the two catalysts are that potential mining license, and the price of nickel.
Axiom is hoping that they have the inside track on getting the license thanks to the work they’ve done on the site to date, but I have no idea what the probabilities or politics might be… the stock fell 50% after their previous license to mine was thrown out by the courts in late March, and it has started to recover a little bit on that optimism about being able to get the license back, so perhaps it could trade as high as the A$0.40 neighborhood if they do get a new license to mine (that’s about the high of the past year, investors expected production to be imminent before the court negated their license so presumably much of the other prep work for mining is done). That would be roughly a double from here… and I don’t know what the downside is if someone else wins the license to mine that project, Axiom does have some other assets, mostly copper/gold/zinc projects that are still in the exploration stage in Australia, but I don’t know what they might be worth (Axiom’s market cap right now is about A$67 million, which is about US$50 million).
As to whether nickel is going to surge higher, well, on that your guess is at least as good as mine. As with iron ore (which, like nickel, is driven largely be steelmaking demand), we have to make educated guesses about whether the huge China-driven cyclical peaks of the last ten years are the norm and we’re going to have one again, or whether the norm is more like the 15 or 20 years before that, with much less dramatic swings in price. Here’s the nickel price for the past 27 years from Infomine, just to give you a picture to go with the sentiment:
So… that should be enough to get you started on researching Axiom if you’re interested, we’ve got other stocks to find. Moving on!
“Bounce-Back Belter #2
“Hot Aussie oiler sitting on a potential multi-billion barrel crude ocean… and the market doesn’t have a clue! Since January, shares in this tiny energy firm have near-doubled. An impressive ‘bounce’ for a speculative, small-cap oil play…
“But the way I see it, the share price run hasn’t even started yet.
“Right now they sit on three prime oil targets.
“The first is a well in the Gulf of Mexico, which should pump out 2,000 barrels of crude by this time next year. Another high-potential prospect in Tanzania holds 170 million barrels.
“But these two don’t come close to the potential of the third oil lease…and it’s this third multi-well target that has me REALLY excited about this lit