What’s “Gold-X?” Is this really the “easiest way to land 100-bagger returns on gold” with less risk?

Sleuthifying the latest pitch from Gerardo Del Real's Junior Mining Monthly

By Travis Johnson, Stock Gumshoe, October 4, 2017

Today we look into the teased “Gold-X” from Gerardo Del Real, who writes the Junior Mining Monthly newsletter and calls himself a “Texas gold expert” … his ad promises an easier way to get huge returns on little gold stocks while taking a lot less risk.

“Gold-X” seems an odd name for a “secret” investing strategy, since to me it calls to mind Bre-X, the biggest mining fraud in history (and the reason why Canada regulates geologists and has specific reporting standards for geological data from mining companies)… but that’s probably just me.

What, then, is this less-risky way to make huge returns from junior gold stocks? Let’s dig into the ad and see what clues Mr. Del Real drops for us while enticing subscribers to try his Junior Mining Monthly (nonrefundable fee of $299, then $49/quarter to continue the subscription… this newsletter used to be more awkwardly titled Resource Stocks Digest Premium, in case you’re thinking that Gerardo’s name sounds familiar).

Here’s the opener:

“Texas gold expert reveals a strategy unknown outside of his billionaire clients:

“Introducing ‘Gold-X’

“The easiest — yet least-known — way to land 100-bagger returns on gold… while cutting your risk by 87%

“WITHOUT owning giants like Barrick Gold

“And WITHOUT touching coins, bullion, futures, or ETFs.”

Del Real does note that he’s convinced gold has entered a new bull market, which is certainly a common refrain among gold-focused newsletter writers, and that he thinks it is going up for the foreseeable future.

But, again like most newsletter pundits, he thinks he has a better way to “play” gold that you don’t know about. So what is this “Gold-X?” More clues:

“A way to profit from gold almost entirely unknown outside of billionaire resource insiders like Rick Rule….

“I’m talking earth-shattering returns like 2,700%, 6,120%, and EVEN 12,006%… often in a year or less.

“All from just tiny jumps in gold… or even if the price goes down.

“And with absolutely none of the risks of buying typical gold stocks.”

He also notes one of his biggest “Gold-X” successes, which he recommended early in 2014 at 16 cents and recommended to sell when it hit $1.50 after about six months, at a time when gold prices were actually falling, so that’s interesting — and he notes that “Gold-X plays” surged by an average of 121% while the junior mining sector was falling by more than 50% from 2009 through 2014… and he does show charts for a few examples, AVU, CGP and RSV.

So what makes these kinds of little gold stocks attractive? Why are they “Gold-X” and not just like all the other wildly volatile little junior mining stocks?

Well, partly it’s backtesting — you can find anything you want if you’re looking for historical patterns… but there is a different kind of gold company that Del Real is teasing. Here’s a bit more from the ad:

“John Paulson, who famously made billions shorting the housing market before the 2008 crash….

“He’s now making another big bet with $900 million in gold stocks, including ‘Gold-X.’

“In fact, he recently headed a round of financing worth $55.9 million on a single ‘Gold-X’ play.”

And, of course, he can’t avoid mentioning every junior mining analyst’s favorite guy, Rick Rule…

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“Billionaire Rick Rule calls it…

“The #1 Ingredient for 100-Bagger Returns in a Gold Bull Market”

So what makes these “Gold-X” stocks more interesting? From the ad…

“These firms don’t just own one gold mine, or two, or three.

“Often they own fifty or more different gold properties, spread out over multiple jurisdictions.

“That means the opportunity for a big discovery is exponentially higher.

“So it’s no surprise that so many ‘Gold-X’ plays are highly successful, where gold miners fail.

“Some of these companies may literally discover five or more successful gold deposits.”

And they are apparently not as profligate as other gold companies…

“While so many junior miners have to fund their own exploration, and punish investors by diluting shares…

“‘Gold-X’ plays do NOT dilute shares.

“They are free from debt.

“And the money you invest is off the table.

“How is that possible?

“All of their exploration is funded not by you, but by partnerships with deep-pocketed companies…”

So, as Del Real does eventually get around to saying, what he’s pitching here are prospect generators… which are usually small companies focused on a team of geologists who study historic data, do very light exploration work, and stake out properties that they think are prospective for gold (or something else). In general, these kinds of companies try to do the bare minimum when it comes to exploration, proving up their ideas and properties only enough to attract a deep-pocketed partner who will jump in and provide most of the exploration spending and, later, do the heavy lifting of proving reserves and financing mine development and actually mining.

And yes, that’s an attractive business model — though it’s also not a guarantee of success, lots of geologists and explorers spend a lot of time spinning their wheels exploring territory that doesn’t turn out to have any special value. But which ones does Del Real like? He goes on to drop some hints about his three favorites, so we’ll try to ID those for you and get you started on your thinking…

“‘Gold-X’ Play #1: Why the “Smart Money” Lo