“The $58 Billion Mining Coup of the Century” (Sovereign Society)

By Travis Johnson, Stock Gumshoe, December 15, 2010

Well, we have here today another of those stinkin’ teaser ad “presentations” that doesn’t allow access direct to the transcript … so I’ve got to listen to the whole dang thing. Never doubt how much I love you, dear Gumshoe Faithful!

Here’s the pitch from the Sovereign Society, from Jeff Opdyke (he’s teasing to tempt us into subscriptions to just their basic Sovereign Society membership, which is $49/year):

“Tiny Rare Earth Mining Company Scoops:

“The $58 Billion Mining Coup of the Century”

“It’s a massive discovery that has the power to save America from a green tech crash… break what’s been called: ‘the world’s first MINEROPOLY’… and make early investors as much as 1,443% by January 31st…”

I’m going to assume (foolishly, perhaps) that they mean January 31 of next year, that being about six weeks away. And yes, though your friendly neighborhood Gumshoe is, of course, generally above such petty things as filthy lucre, he wouldn’t say no to making 14X his money in six weeks. He might say, “Ha!” … but not “no.”

So let’s figure out what the Sovereign Society guys are pitching — and whether they’re just trying to catch up on the massive wave of newsletter marketing that’s been profiting from (and in some cases, causing) the last several months of spiking share prices in rare earths stocks, or they’ve really got the ability to predict some kind of catalyst in January that might mean something.

And like I said, this one ain’t got a transcript, so your humble servant is forced to paraphrase and go from notes — I’ll try go get the details right, but I won’t actually do much quoting.

The ad says that the guys behind this relatively young stock come from other successful companies, including one whose price leapt 9,500% in less than four years.

So there’s one clue.

And “they’re going public with their latest small cap discovery” — so, in case you hadn’t guessed, this is a little company. As pretty much all rare earth explorers and miners are.

We get one clue about the size of the potential: He says this is a “4.9 million ton jackpot strike.” Remember that, that may be the only important and specific clue here.

Though this one is a close second: We’re told that this deposit is in “one of the planets last great mineral frontiers”

Opdyke says that this virtually unknown miner scooped up the $58 billion discovery in the “mining coup of the century.”

And we hear a lot in the presentation about rare earth metals in general, but if you’re like me you’ve got much of that memorized already — we know that these are needed for thousands of hot consumer products, strategic defense stuff like guided missiles, electric cars, etc, and that there have been supply shocks and the attempt to create a mineral monopoly (in China).

As you’re probably aware, the fear over supply cutoffs from China (which pretty well killed off all non-Chinese rare earths production a decade ago by undercutting on pricing, and is trying to use its rare earths hegemony to get rare earth users to move their advanced manufacturing to China), combined with increasing attention in the mainstream media particularly when some Japanese companies couldn’t get the exports they needed, has helped to drive the share prices higher for all these little companies.

And Jeff specifically notes tantalum, which he says was one of the hottest investment stories of last year as it tripled even though no tantalum was produced last year.

And he says that tantalum sparked a civil war way back when Sony’s PS2 introduction increased demand so much that it caused a civil war in the Congo.

But you probably get the point, he tells us that the market is increasing in size dramatically, and that it will double by 2015. But which rare earth miner does he recommend for profiting from the China-spurred supply crunch and the fears of China’s potential halting of rare earth exports? One of the many we’ve already looked at and seen teased by other newsletters … or someone new?

He also mentions Molycorp, which he says is “tiny” with “nowhere near enough to save the day” — mostly because he wants to tell us that this secret discovery is 100X bigger than Molycorp’s.

So, the company was “created by a number of old mining legends”

And their site is an “old abandoned uranium mine that was shut down in the 1980s.”

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We’re told that their resource base is 4.9 million tons of rare earth minerals, likely the biggest rare earth metal deposit in the world and enough to supply 25% o