“Buy Them Before Barrick Does”

By Travis Johnson, Stock Gumshoe, February 26, 2008

This one comes in from Jason Hommel of the Silver Stock Report, and several readers have asked me to take a look. He has a free email newsletter that you can subscribe to if you’re interested.

In addition to that free newsletter that he offers, he will let you take a peek at his personal portfolio for $50 a month. OK, $49.95.

Now that’s a good racket — he doesn’t even have to write anything witty or wise? The Gumshoe has to look into this. Anyone wanna see my portfolio? For a beer, if $49.95 a month is a bit steep? Not to turn you off, but I’m afraid that I’m pretty much just tracking the S&P for the last few months.

But anyway, in the last email he sent out on February 21st he mentioned that he had a particular stock in mind that was in his portfolio, as one that should be bought before a major miner buys them out. It’s a gold and potentially copper miner, and he intimated that Barrick was on the hunt though didn’t specifically say that Barrick was likely to buy this specific company. Unless you read between the lines, where the really good stuff usually is.

We don’t learn too much about this one, but here’s what I’ve got:

One junior gold miner has moved from a new exploration to production inless than two years, which is a phenomenal achievement for such a tiny market cap of a paltry $9.5 million.

The stock trades at $.50 per share.

“They are producing over $1 million of high grade 1/4 oz./tonne gold annually.”

And …

“They just started shipping gold this January. But it’s their copper discovery that caused me to buy the stock. They hit 41% copper over 27 feet! They have not yet begun to process the copper, but when they do, I expect this stock to move up significantly. The real benefit here is that this company is not likely to dilute the shares to expand production; since they are making money now.”

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So … not a whole lot of text to the teaser, but enough clues that the churning Thinkolator can spew out an answer for us … which is …

Coronado Resources (CRD on the Venture exchange up north, CRDAF on the pink sheets).

It’s not at .50 cents any more … I assume it’s the influence of this teaser email or of the actual recommendation, but the stock bumped up right after this email went out from .50 a share to about .75. I don’t know if it’s likely to come back down in the next few weeks, but these microcaps that get a newsletter boost often do retrace their steps.

Coronado did indeed get it’s first payment from production at the Madison gold and copper property just last month, and I”ll take him at his word that it’s unusual to generate income from such a new holding (they have been working on it only two years). To be fair, though, this is not a new minesite — this is a rejuvenation of some older mines that were active for decades up until the 1950s or so … I presume that the whole $900 gold/$4 copper thing made everyone remember the mines were still there.

But really, if you want to read more about this one, you can just go check out Hommel’s article about it from November of 2006 — apparently he was a bit early in getting on board this one, so the recent spike up in the price still hasn’t quite gotten it to where the shares were trading 15 months ago. The shares really got their big burst about two years ago when they started working on the old Madison minesite, but have since traded between about .50 and 1.50 — driven, I imagine, by mining results and news.

Again, as with so many of these mining and resource stocks, I don’t know anything special or secret about this company and I don’t know whether it’s worth a gamble — if the resource experts among the Gumshoe faithful want to chime in, I’d be more than happy to hear their opinions.

But I do know that this is the stock in Jason Hommel’s portfolio that he currently believes is worth $50 just to hear about. Maybe it’s worth it, maybe not, it’s your money so it’s your call. I don’t know enough about this one to invest in it, and I don’t know enough about Hommel to pay him for anything, but I’m happy to at least keep an eye on some of his free stuff and teaser stocks.

Happy Investing to everyone in Gumshoe Land.


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GigaBill
GigaBill
12 years ago

Haven’t been so impressed with Coronado (CRDAF) as with our old friend Lynas (LYSCF). The charts show a slow but upward trend for LYSCF since start of ’08.

Presently I am holding, buying on dips, although I have cycled through in/out over the last 18 months on the peaks.

Thanks for all your hard work, Travis!

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GigaBill
GigaBill
12 years ago

Signed off prematurely without adding a sneaky way to play the production start-ups.

Joy Global (JOYG)… nice situation with growth in share price AND a small dividend.

Currently off of the 52 week high by little over $1

Again, I do own this stock long and am proud of it!

Out.

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Hollis Whitney
12 years ago

Gum:

I have an old holding that is just starting to move.
With all the new evolutionary ideas about energy nothing has happened to it.
Finally the market is recognizing that change will be revolutionary which is what this is all about.
Said company is HYPF.PK
You should read the testimonials at HYPOWERFUEL.COM

Brian
Brian
12 years ago

Have tracked the results of Joy Global for a few years now and am impressed. Don’t own any shares as of yet.

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tony karmen
tony karmen
12 years ago

more good gold drooy , gbn. read on it’s a c/saw market but a pure cash cow here is a cancer cure PVCT read all about it.I sold drooy at 9. kick my self and gbn
pvct i own crossing my fingers “mucho” my future ly\s on the fda thank you gumshoe, we live in a HOSTILE STOCKMARKET,WORLD of greeeed

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paul h
paul h
12 years ago

I’ve been investing in junior minors to hedge since ’06 . I’ve started to wonder but NXG and GBN have started to make me believe

Steven Schultz
Steven Schultz
12 years ago

With hundreds of Juniors, how does he do it? Even further, valuing them is time consuming when doing due diligence. I think I’ll stick with FMNJ as a long run favorite at $.007. THey just started producing and have a wonderful website.

Jess
12 years ago

Do you have any feedback on the teaser for Money Map VIP Trader for “Blue-Hot Chips”

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G IMBURG
G IMBURG
12 years ago

Wall Street tends to follow the “BEST OF BREED” theory when investing in most anything. I always look to see if any institutional investors are involved, this way I get a second opinion other than my own. Oppenheimer and JP Morgan hold large positions in sino gold as an example.

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Gary S.
Gary S.
12 years ago

Sierra Gold..SGCP…just coming into production. Both alluvial and hard rock. Up 200% Plus past 60 days and still under a nickel. Do your own DD..but..almost 3 oz gold/ton!

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BbRoad
BbRoad
12 years ago

Before I found you, I was, well, stupid. I didn’t understand that most stocks don’t go up and up, whether for short terms or long. I found Hommel long before you, and while I think the guy is honest but somewhat sloppy, or batty, in some of his reasoning, I sleuthed out his CRD recommendation when he first made it and bought it at $1.45 a share (price after the stock split). What a dope I was. Then, I began to realize that Hommel has a pretty good deal here. He makes his recommendations to his faithful, then they spread the word, the stock goes up, and dummies like me get stuck with it after wiser folk sell the rallies. I use you, Casey’s and Vector Vest now, but I am still learning the “sell the rally” mentality.
Thanks so much for your great blog.

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Tom L.
Tom L.
12 years ago

I just heard about Hommel too. He issued a report last week showing that Barrick has their production hedged at $296/oz until 2012. Glad I don’t own that! I love Lynas, going to $10 once the Malaysia facility starts up. Range Resources plans to spud first well in July.

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JG
JG
12 years ago

juniors are a tough breed to evaluate. There are many factors in which to consider—-management, property, financing, locale, etc.

The best game plan with juniors is to buy a basket of them with the knowledge that a couple may tank, but then some others may go up 3-6 fold. You definitely need Patiene when you invest in the juniors

That said, the juniors can be a very profitable investment. The stocks are still being held down, you might even say some are being manipulated. So if you have some funds to allocate to this market, now would be a good time.

JG
JG
12 years ago

Soory, I meant to say PATIENCE

JE
JE
12 years ago

Juniors are like gambling except the odds are really in your favor. Over the last ten years I have added a new bathroom, new room and remodeling a another bathroom right now with Junior gold/silver stock winnings. I follow three to four sources try to glean the most interesting and cut losses quickly. My portfolio has become self sustaining and fun to play with.

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LS
LS
12 years ago

Hi JE
It would be nice to give some names.
From this forum I learned about FMNJ and got in yesterday.I liked the site and the story on it.

LS
LS
12 years ago

About names
I am long in CDE JIN.A german newsletter was shouting about PLTG.I took a small position but with great doubt.
I also have Eldorado gold(EGO).Got in around 7 cad and have been at a loss ever since.Is there someone who has some info on this company?

JE
JE
12 years ago

Names, ey. Well most recently I got into GSPG (Gold Springs) at .0001 and got out at .0166. $332.00 into 4980.00. I set a mental stop at 5,000 when it went it over that and got out when It dropped. The stock is now at .0195 to .02 and holding. Another winner really big winner was Bema Gold now part of Kinross, .50 to 21.00 dollars, again $300.00 in and out when it was small and I now hold 100 shares of Kinross. The same with GoldCorp and another junior. I now have 100 shares left at 43.00. Currently holding ITRO.OB and UCOI.OB, DKGR.PK plus 12 more. Only time will time if my success continues.

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