Small Golds 'R' Us
San Francisco Opportunities
Conference Nov 2001
We got back to Miami last week from San Francisco where we spent the weekend attending the New Opportunities Conference. I wrote a piece last May about a similar conference held in Bal Harbour, FL. You should quickly read that piece first, because I feel exactly the same way only more so.
We were hoping the conference would be quiet so we could meet with the officers of the small gold companies we want to attract as advertisers. Naturally everyone else hoped the halls would fill with eager investors.
We hit the jackpot. There may have been a couple of hundred or so people listening to the speakers but while the talks were going on, the main conference hall was virtually ours . So we did get to spend a lot of time shooting the breeze with the managers of the small golds.
I remain convinced the bottom is in and that the people who are aggressively investing in new properties today will be the leaders of tomorrow. Pay attention to these names, National Gold, Silver Standard Resources, Golden Eagle (MYNG), NovaGold, Vanessa, International Wayside (IWA.V)... Their stories were so compelling that I'm going to do essays about some of them.
The president of National Gold (NGT.V) paid for the coffee for the conference (and let me add, that is no mean tab to pick up, the Marriott is all silver service, piping hot delicious coffee, even better than Starbucks) - and his 'tent' was right next to the serving line for the wine and cheese event in the evening. If you were hungry, you were going to read his message. He had an amazing 'pitch,' that lasted about a minute, and was quite remarkable. (Barb said he ought to be working for 321gold). Anyone that smart at marketing is going to mine gold at a profit. Buy some National Gold before it goes up more.
And the President of Silver Standard (SSRI) has an incredibly clear game plan. He's buying up silver mines for 2.5 cents an ounce for silver. If you don't find that compelling, go buy some Enron while you still can.
Of course we knew the Vannessa Ventures (VNVNF.OB) crew, we'd already met them in Miami and they advertise with us. And despite what you read on some of the message boards these guys are not mean bandidos, they are real gentlemen who wouldn't say 'boo' to a goose.
It was fun to meet Rick Nieuwenhuyse and Greg Johnson from NovaGold. (NRI.TO) They are also sponsors of ours but we hadn't actually met them before. Janna, Rick's Russian wife and financial manager, is charm itself. The big attraction at their booth was a wonderful 10oz gold nugget that was found by a placer miner on one of their Nome lease properties in Alaska. It must have been 3 inches dia, and sadly we didn't get a photo. Janna likes to spend time at their Alaska properties, and I could hear Barb fixing up a trip for next summer, so she can go gold panning for a nice big nugget. NovaGold have a super facility up there with accommodation for 75 miners.
Talking about women and gold we mustn't forget Joanne Freeze, who is President of her own gold mining company: Candente (DNT.V). She is a bundle of livliness, passionate about gold mining and geology and Peru.
We own a gazillion shares of Golden Eagle (MYNG.OB), bought at 5c - how can one resist? So it was very nice to actually meet Terry Turner, Sabrina and Ron, who we'd heard about from a friend who recommended the stock to us earlier this year. A nice bunch of people, and their claim to fame at the show was their 'gold' advertising golf ball giveaways. Real balls.
One of the biggest surprises was Jon Nadler at the World Gold Council booth. Barb had been ready to 'have a go' at the him about their controversial gold jewelery campaign and all the money they waste. But after standing in line and listening to him give a 5-minute talk to a young Chinese man, about investing in bullion, she changed her mind. He is actually a client advisor of the WGC, is just crazy about bullion, and I forget how many tons of gold he said he'd 'sold' this year. But it was a lot. So we just talked gold, and put over our ideas about gold promotion for the future.
Anyone who might question just who is the leader in marketing among the miners, all they had to do was see the GoldCorp (GG) booth. They had caps, chocolate gold bars, gold specimens. And I am sure that if the gold-show clientele was half its age they'd have gold-painted dancing girls. In the days when so many companies do absolutely nothing whatsoever to promote themselves, for their stockholders, some of these booths were a sight for sore eyes.
I was sitting in the auditorium listening to one of the speakers when the guy next to me nudged me in the ribs. It was one of the people with a booth that I know. "Look at these people, none of them are under 60." (Barb was miffed, she's only 57). I looked around the room and realized he was dead right. There were virtually no young people in attendance and that means something. It means none of the people under 50 or so has any idea of what a gold boom looks like, they have never seen one. And it means the industry in general had better modify their marketing, they are preaching to the choir, not attracting new and younger investors.
I did corner one live investor who actually owns some gold shares. He was wealthy and owned only two stocks, both bought for dividends. And since gold shares by and large aren't earning enough to pay dividends, I can understand why investors are so gun shy. And this is a year where gold stocks have been the best performers. Gold stocks are going to have to go up a bundle before they begin to attract attention. I will go on record today and say that every single mining company at the conference has the potential to go up 10-fold. These are the winners, not the whiners. The whiners all stayed home. As indeed did virtually all the major gold companies except Harmony (HGMCY) whose literature was brilliant, by the way.
I have wondered for the last couple of years as to when the bottom would fall. After attending the conference, I can say with some confidence, the bottom for gold was at $252 in 1999. If you are waiting, don't bother, they don't ring a bell at the bottom.
I thought I was both smart and experienced but it took me two years to figure it out. And the bottom of silver just passed at $4. It might and I repeat, might, go down a tiny bit more. But when you can buy 12 ounces of silver per share of SSRI for $.10 an ounce it's worth doing. That's cheap, do you really think it will go down to $.08 per ounce. Go buy some.
We got to miss Enron imploding. Pity, the head of Enron is Bush's energy advisor. I guess it's good, he will have more time on his hands now to help George lead the country. But while Enron tanked, we took a tour of the USS Hornet and got to meet one of the SBD pilots from the Marinias Turkey Shoot in 1944 where US forces shot down over 472 enemy aircraft in one battle. Incredible. And now we seem to be our own worst enemy. Someone needs to mention the word Geneva Convention to our Secretary of Defense who happens to be an ex-Navy pilot. We are going to rue the day we stopped fighting according to the rules of civilized warfare. It's not right to murder people in cold blood and it doesn't matter what kind of uniform you wear when you do it.
Enron imploded, Argentina imploded and is now confiscating the pension plans of its citizens. We have handed total power in this country to the FBI and the CIA after the greatest intelligence failure in history rather than fire those who failed so totally at those agencies. Is it no wonder the average American investor believes a new bull market just began? After all, they'll believe anything.
To an investor gold performs two functions. It preserves wealth while offering a route to potential profit and it serves as an insurance policy. Now more than ever the insurance function of gold is necesary. Nobody ever lost their fortune invested in gold. $90,000 invested a year ago in Enron is now under $1000. And Enron was the darling of the Talking Heads.