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Buy These Gold Stocks Before Everyone Else Figures it OutBy
Monday, June 4, 2007
David Cole got a lot richer after our True Wealth Gold Conference last week... You see, David is the CEO of Eurasian Minerals, one of a handful of companies that I invited to speak at our conference. Shares of Eurasian rose by 18% in the two days after David spoke. Readers have made money out of this conference... Two years ago at our gold conference, I only invited one gold company CEO to speak – and that was Seabridge Gold. Shares of Seabridge are up more than 500% since I originally recommended them in my newsletter about two years ago. I think the next big story in this space will be businesses like David Cole's. I wanted to share the core idea with you now, and why it has such a tailwind now... The Best Opportunity in Mining is With This Group This year, with the help of Matt Badiali, I expanded the list of speakers at my gold conference dramatically. You see, Matt writes the S&A Gold Report, and he's a geologist. A few months ago, we traveled to Canada and visited a ridiculous number of mining companies, looking for opportunity. Matt and I invited the best of the companies to our conference. For the most part, the companies we liked followed a similar model... they are called "prospect generators." These guys are the young blood in Vancouver... old enough to have experience, young enough to be hungry and work hard looking for metals, and smart enough to make it all work. The basic model is this: The big mining companies don't make discoveries any more. And the tiny mining companies are often just good promoters masquerading as miners. The real discovery work is done by these prospect generators – guys who go out and find mining prospects. In short, prospect generators do the fieldwork o find a site with excellent potential, then partner with a mining company. The mining company develops that project so it can sell it a major gold producer. The prospect generators move along after passing the project to a partner – but crucially – they keep a percentage interest (shares) as a "finder's fee" for the opportunity they discovered. Over time, these prospect generators end up with shares of many companies. David Cole's Eurasian Minerals is one example... David stepped out on his own, after a career with Newmont Mining. But he picked up right where he left off... He was sizing up Turkey and Eastern Europe before he left Newmont and has since developed these projects while out on his own. He already has one success story in Serbia. He picked up more than a million shares of the company that took over the asset and got a royalty of 2% on any gold that comes out there. This is one example of how it works. Incidentally, when Matt and I met with David Cole in Vancouver early in 2007, I had mixed feelings... I was incredibly impressed with how smart he was and how committed he was to what he did. But we wondered if he was a little crazy, going into the wild nooks and crannies of the world... David moved on from Serbia after he struck a deal, and took his local expertise into Romania. Romania has gold? Why, yes, actually. David actually prefers to be in wild locations. It keeps the level of competition low. For example, he has been working in Haiti recently... and has found that even the low-hanging fruit could turn out to be quality gold deposits. His penchant for digging where nobody else will is paying off for investors... shares are up 40% since we visited him earlier this year. Matt Badiali recently explained the business model better than I can:
No doubt, you will be hearing a good deal about these companies in the future, as this is the right business model for the mining industry. The word is getting out. I suggest you don't wait to you acquaint yourself with these companies. I recommend start learning as much as you can about prospect generators, like David Cole's Eurasian Minerals.
Market NotesNEW HIGHS OF NOTE LAST WEEK
Tiffany (TIF)... jewelry
Nokia (NOK)... cell phones EMC (EMC)... data storage RadioShack (RSH)... electronics Goldman Sachs (GS)... a really big hedge fund Plum Creek Timber (PCL)... timberland Forest City Enterprises (FCE-A)... timberland BHP Billiton (BHP)... diversified mining Anglo American (AAUK)... diversified mining Freeport McMoRan (FCX)... copper and gold mining Ivanhoe Mines (IVN)... copper and gold mining Martin Marietta (MLM)... sand and gravel mining Cameco (CCJ)... uranium mining Potash Corp. (POT)... potash mining Cleveland Cliffs (CLM)... iron ore mining Aber Diamond (ABER)... diamond mining Northern Dynasty (NAK)... gold mining Rio Narcea Gold (RNO)... gold mining Anheuser-Busch (BUD)... wheat, rye, and barley mining Terex Corp. (TEX)... mining equipment Kennametal (KMT)... mining equipment Joy Global (JOYG)... mining equipment Manitowoc (MTW)... mining equipment Foster Wheeler (FWLT)... energy infrastructure Shaw Group (SGR)... energy infrastructure Quanta Services (PWR)... energy infrastructure Pike Electric (PEC)... energy infrastructure |
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