I’m traveling this week, currently in Panama for the Swiss Mining Institute conference. I’ll be on a panel tomorrow morning along with analysts and asset managers from all over the world.
Notably, I’ll be the only newsletter editor on the panel. You’d probably recognize many of the names here. Sprott, Frank Holmes, Peter Schiff, Van Eck, etc.
I’m also working on scraping together my “Golden Portfolio” Hall of Fame in my downtime.
I should have it all set for this Friday’s issue of Golden Opportunity, but I wanted to give another quick insight from what I’ve found so far.
So for today, I’m just going to drill down on one company that’s definitely in my Hall of Fame: Highlander Silver Corp.
I’ll just tick off a few of the characteristics that most of my HOFers will have in common with Highlander.
For one, it’s an OTC stock.
If you’re shooting for the biggest gains in the precious metals market, you usually don’t have the luxury of waiting until a company is uplisted on a major exchange. I know OTC stocks have a reputation of being risky or untrustworthy. That reputation is well earned.
But the very fact that most investors are afraid of OTC securities gives you a massive edge. Because for better or worse, the biggest gains from gold stocks are going to come from buying stocks that trade OTC.
If you wait until a company gets listed on the NYSE you’re not likely to see 10X gains. You probably won’t even get the chance to own these stocks – because many of them get acquired before they can sniff a NYSE listing.
Highlander also caught my attention well before it produced a single ounce of gold or silver.
Being able to spot firms BEFORE they go into production is a massive advantage that most investors and even big institutions don’t have or can’t even consider.
If you’re a big investment firm, you have to focus on landing big fish. Tiny companies just don’t move the needle.
And if you’re a retail investor, it’s very difficult to discern the difference between high quality pre-production companies and puffed up moose pasture companies that will never produce anything more than Investor Relations campaigns.
There’s no real magic or shortcut to finding the real deal miners – it’s taken me 20+ years to hone my craft and to assimilate my process with standard financial analysis.
But if you’re not buying these companies before they go into production, you’re missing the biggest potential gains – and most of my HOF companies.
Highlander also had another big commonality with my other HOF selections: high grade mineralization.
It’s extremely difficult to make money as a miner if you don’t have high grades. That’s because it costs the same to mine a tonne of ore whether there’s a dime in it, $10 bill, or a $1,000 bill.
High grade ore is more like $1,000+. Low grade ore might get you to $100 or less.
For Highlander, at conservative gold and silver prices, they’re looking at $2,000+ in revenue per tonne.
No matter how talented you are as a mine developer, without high grade, you’re always swimming upstream – fighting costs and at the whim of metal prices.
There are other characteristics in play here.
I’ll talk more about my Hall of Fame on Friday, and hopefully have it prepared for you to see for yourself.
Best,
Garrett Goggin, CFA, CMT
Lead Analyst and Founder, Golden Portfolio