If newsletter guys know anything, it’s how to sell gold investments — gold has been at the core of the newsletter hype industry since the 1980s, attracting ornery gold bugs every time the gold price rises a bit, so we’re seeing most publishers running quickly to the virtual mailbox with their gold pitches these days… Stansberry is again promoting John Doody’s Gold Stock Analyst, all the junior mining lovers are coming out of the woodwork again now that some optimism is bouncing around Vancouver again, and we’re seeing all the ads for “gold in your 401(k)!” that pop up whenever gold prices are rising… along with the enticement that a lot of the newsletters are using actual gold as a freebie for new subscribers (sign up and we’ll send you a gold coin!).
Today we’ll look at one of those, the pitch from Nick Hodge that starts us out with the FOMO headline, “Here’s Your Last Opportunity Ever to Invest Before the Final Gold Bull Market Begins.”
That’s never true, by the way… there’s never “one last chance,” and if there were predicting such would be impossible — no one knows when gold will top out in price, or which mine will release good news… I’m sure some gold mining analysts are better than others, but the price of the yellow metal itself is the main driver of all of these companies, and that’s about as easy to predict as Donald Trump’s tweet subjects in any given week or month.
The pitch is actually from Gerardo Del Real, who writes his own junior mining newsletter, but this particular ad is for Hodge’s Wall Street’s Underground Profits ($99/year to start, autorenews at unknown price), and he “interviews” Nick Hodge in the ad… here’s how he introduces his publisher:
“I’m about to introduce you to one of the most interesting gold investors and venture capitalists I’ve ever met.
“His name is Nick Hodge.
“And he’s about to make the boldest claim of his career.
“He believes we have quietly entered a short window of time for you to invest before gold turns from bearish to bullish.
“‘It’s the final gold bull market’ he claims….
“Simply buy the right gold stocks today. One gold stock in particular… Nick’s #1 stock opportunity of the decade in gold… could be life changing for your portfolio.”
I guess it could be. “Could” is very powerful word in marketing, since we’re all primed to gloss over that and insert the words “probably will” in our minds.
So what’s the stock? Hints coming…
“That’s why I’m urgently recommending viewers to move capital into my #1 gold stock pick. It has more upside than any other metal stock I own.
“Analysts see a 450% spike already. But it could go a heckuva lot higher.
“#1. It’s trading for very cheap now. The bear market in gold pushed the price down way below what analysts believe it’s worth.
“It trades around $1 right now.
“#2. The company is quietly buying up mines at a rapid pace. It has a unique strategy I’ll share that’s allowing it to acquire mines for up to 90% off. So you can imagine, when gold prices move up to even just $2,000/oz, this stock will absolutely rocket higher.”
We’re also told that the stock has a market cap of around $200 million, and that Nick Hodge himself owns shares. What else?
“It’s acquired many assets recently, if you totaled all its gold reserves together, it’d have one of the largest deposits in the world.
“But it has nine projects, so it’s all split up and thus under the radar.
“You google ‘largest gold deposits’, it won’t pop up because it’s spread out over multiple mines.”
That’s a challenge, I imagine, because small mines are dramatically less valuable than large mines — big companies crave big deposits because they can mine them for decades while dealing with only one permitting process and one construction project, small mines can be almost as hard to build as huge ones but are far less valuable.
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The ad is not exactly new content — it teases us about the possibility of $1,500 gold this year, a 15% rise in the price, but gold has already topped $1,500 in just the past week. It looks like they pulled their data the beginning of the Summer.
They also brought Mario Garnero into their “interview,” which for those who have been paying attention for a few years probably means we’ve already got our answer… but we’ll keep checking the clues just to be sure. Here’s what they say about him:
“Mario’s a Brazilian banker and trailblazer. He’s been called the “Father of the Ethanol Car.” During the 1979 petroleum crisis in Brazil, Mario challenged the top four automotive companies in the country to produce one million cars that run on ethanol. Three years later, 90% of Brazilian cars ran on ethanol thanks to him.
“He’s a personal friend of the Rockefeller and Rothschild families. As well as U.S. presidents including President George W. Bush and President Clinton.
“Currently, he’s the chairman and largest shareholder of Brasilinvest, the largest merchant bank in Brazil.”
He mentions meeting Mario at a Carlyle Hotel meeting four years ago, which further reinforces that their first meeting was during Mario’s series of meetings to promote this little gold stock back in 2014… Frank Curzio also teased this same stock, under its old name, back then, also based on meetings he had with Mario Garnero and the other investors in the company.
But I won’t spoil the surprise just yet, there are also a couple other clues… Hodge says the company is in…
“… full-blown M&A mode at the moment….
“While miners have been going out of business or getting acquired, this incredible gold play has over $9.2 million in cash to spend on mining activities. Zero debt.
“It’s been making acquisitions since 2011. In the past five years, it’s acquired seven gold projects.”
“If you added all its gold up, it currently holds 23 million ounces of gold. That would make it one of the top 10 gold mines in the world if added together.
“When you multiply its reserves by the average price of the past few months…
“You get a value of $29.9 billion.”
That’s silly, of course… in addition to the fact that small deposits tend to be much less valuable than large ones, gold in the ground is never worth anything close to the market price of refined gold. You can argue about whether it’s worth $10 an ounce or $100 or $200 an ounce, depending on sentiment and the specific project and its appeal (what are the mining costs, what’s the regulatory regime like where the mine is, how much exploration has been done? How big is the mine and how quickly could it repay the capital cost of building the infrastructure?), but it’s never worth more than a small fraction of the market price of gold.
“… its reserves are spread out among many mines in the U.S., Canada, Peru, Brazil, and Colombia.
“And the CEO told me privately they are still looking for more assets to acquire.”
We’re also told that insiders own 20% of the shares, and they include Mario Garnero as well as Rick Rule’s Sprott Global… and that there are only two analysts covering the stock, HCW and Roth, both of whom see the price soaring (that’s where they get that “analysts see 450% spike coming” bit).
So who is it? Thinkolator sez this is GoldMining Inc. (GOLD.TO, GLDLF), which graduated to the Toronto Stock Exchange a few months ago but has been a heavily touted stock several times in the past (mostly under its previous name, Brazil Resources).
GoldMining is a project of Amir Adnani, who I think used to be an investor relations/stock promotion guy in Vancouver a decade or more ago and then turned to the ownership side with Brazil Resources and his other company, Uranium Energy Corp (UEC), so he is very investor-savvy and great at promoting his businesses, including relationships with lots of newsletter folks (and getting that “GOLD” ticker in Toronto). That’s not necessarily a criticism, by the way, “promotion” is a dirty word for a lot of investors, and there are a lot of promotional charlatans in the mining world so that makes sense… but promoting your company is also a key part of the CEO’s job for any junior miner, these are companies that sell hopes and dreams about a possible future that&