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Secret to Making 4,500% From Gold—Without Owning a Single Mining Stock
For good reason, the world has gone crazy for gold. It's one of the few safe "buy-and-hold" investments available in the world today. But very few investors know about THE PERFECT GOLD INVESTMENT. It is probably the safest and most lucrative investment you can make in the gold industry—yet it has nothing to do with mining stocks... or gold mutual funds... or gold bullion or coins. During one recent period, for example, this incredible gold investment returned 38% a year... for 18 straight years! That pays you more than 2,400% over 10 years... and more than 32,000% over the full 18 years. It turns just $5,000 into $1.6 million.In short, this has been one of the safest and most profitable investments on Earth. It's no surprise, of course, that some people are already making a lot of money as a result...
The secret gold investment I want to tell you about was pioneered by a Canadian named Pierre Lassonde. It all started with a tiny advertisement placed in a small Nevada newspaper. Pierre Lassonde noticed an ad in which the owner of a mine wanted to sell an "interest" in his stake, in order to repay an outstanding loan. Lassonde and his partner gave the mine owner some cash and became the owner of a percentage of the mine's future royalties, in return. Shortly after the ink was dry on the agreement, a large mining operation purchased the project, and discovered one of North America's biggest gold deposits... The Goldstrike mine. And the Goldstrike mine delivered Lassonde and his partner the "jackpot" of a lifetime. If you had invested $5,000 in Lassonde's company when it first went public, you could have made over $1.6 million. In short, the secret that Lassonde discovered was "Mining Royalties"—that is, simply a right to receive a percentage of production from a lucrative gold mine.Lassonde and his business partner had previously made a fortune collecting royalties in the oil and gas business. So they deciced to replicate their success in the gold sector... They created a company, called Franco Nevada. It's listed on the Toronto Stock Exchange, and the ticker symbol is FNV.TO. It is the perfect business model for several reasons. Let me show you what I mean... Not only did Pierre Lassonde make a ton of money, and make a lot of people rich. He also created what I believe is the perfect business model for the mining industry. Here are the advantages of collecting royalties over typical mining, exploration, and production companies... 1) PAY ONCE—GET PAID FOR LIFE You only have to buy a royalty once, then never have to spend another penny as you collect money throughout the life of a mine. For example, Lassonde paid $2 million for 4% of the Goldstrike mine in Nevada. The first year the mine brought his company $505,304. And today they still get royalty revenues of $74 million a year... all from an initial $2 million dollar investment. Lassonde also bought a royalty on a gold mine in California called Castle Mountain. His one-time investment was $2.8 million and he wound up making $8.4 million in royalties. On a recent royalty on a Montana mine, Lassonde and his partners invested $36 million and made a quick $17 million from royalties. They believe the mine should be good for $12 million a year for the next 50 years... that's a total of $600 million from a one-time investment of $36 million. 2) VIRTUALLY NO OVERHEAD The problem with the mining business is that it's EXTREMELY captital intensive. The entire process to build a mine and produce gold can take ten years or more and cost hundreds of millions if not billions of dollars. Royalty companies, on the other hand, are a cash cow business because they have little overhead and require very few employees. In fact, Franco Nevada has only 21 full-time employees and it's a $2.7 billion dollar company! In contrast, look at how many employees most businesses need, to make half this amount of money. Rite Aid Pharmacies, for example, is a $1.4 billion dollar company. They have 53,669 employees! 3) NO PRODUCTION COSTS Another great advantage of royalty companies is that they don't have to worry about building and operating mines. Or financing huge pieces of equipment. Consider Barrick Gold, for example, one of the largest gold mine operators in the world. Their profit margin is just 8.27% because of their incredible overhead. But a royalty company, like the one I'll mention in a minute, can operate with just a handful of employees, and a single office, and enjoy profit margins of 53.3%. 4) INVESTMENT SAFETY Another advantage of royalty companies is that they allow you to diversify your holdings, so your eggs are never in just one basket. Pierre Lassonde's Franco Nevada, for example, currently has more than 300 royalty interests all over the world. Should one mine stop producing it's no big deal, because you still have 299 royalties that can bring in money. The point is, royalties from many operations are much, much safer than having to rely on just a handful of mines... where unexpected events can wipe out half of your investment. 5) INFLATION PROTECTION Royalty companies don't worry about inflation or increased costs. You see, even if a mine operator has to start paying $10,000 more for its trucks this year, this cost hike does not affect a royalty company, because they continue to get their legally obligated royalties...no matter what. In 2008, for example, gold mining production costs increased 24%, but none of these costs had an impact on royalty companies. In fact, inflation can actually benefit a royalty company. When gold goes up 10% or 20%, the company's revenue goes up 10% or 20%, but their costs don't budge. And keep in mind, massive inflation may be on the horizon. It's important to remember that in the inflation of the 1970's, gold increased in value by more than 2,000%. 6) LIQUIDITY—EASY TO BUY AND SELL As many Americans are finding out the hard way in the real estate business, liquidity is one of the absolute top requirements for any great investment. Well, royalties are a lot easier to sell than mines or land. A royalty can typically be sold on very short notice. When the time comes to collect a profit... it takes only a day or two to get paid. 7) LOW RISK Simply put, owning a royalty is the least risky investment you can make in the mining business. As my friend and legendry mineral investor Doug Casey recently said, "royalty companies are the least risky gold stocks... royalty companies buy a fixed percentage interest in a mine's gross production and let the mining company do the dirty work. They're conservative, and when gold takes off... profit margins of such companies will soar." The point of all this is... owning mining royalties are the perfect business because there's little risk, low overhead, and huge profit margins. As I mentioned, the first company to set up this type of operation was Pierre Lassonde's Franco Nevada. The company was started in 1982, and early investors could have turned a $5,000 investment into $1.6 millon dollars. Since Lassonde created this business model, however, several other companies have copied it, making a fortune for other savvy investors along the way... Made 65% Last Year... One of the most successful companies to follow in Lassonde's footsteps is a firm called Royal Gold. Royal Gold was started in 1986, and began as an oil and gas exploration company. In 1987 the company shifted its focus to gold royalties, and that's when investors started to make big profits... a return of 3,295% for those who invested from the beginning. Today, Royal Gold is the world's leading precious metal royalty company, and owns a total of 118 royalties on several of the world's most attractive gold mines. In fact, they're still making investors a fortune. Get this: While almost every stock in the world got crushed last year... Royal Gold returned a solid 65%. Best of all, the mines in which the company owns royalties have reserves of approximately 64 million ounces of gold. And with gold priced at well over $900 an ounce, that's over $57 billion dollars in royalty interests the company will get a part of in the near future. As my colleague Matt Badiali (who's a geologist with 13 years of experience), says: "Royal Gold is not a mining company. It doesn't have a fleet of geologists and engineers out scouring the hills. It's a $1.4 billion accounting firm that takes its payments in gold." Again, it's another example of how owning gold royalties could make you an absolute fortune in the precious metals business... with very little risk. Royal Gold investors have made well over 3,000% on their investment since the company went public. If you're interested in purchasing Royal Gold, it's listed on the NASDAQ and the stock symbol is RLGD. Great Way to Make 1,000% Before you rush out and buy Royal Gold or Franco Nevada, there's one thing you have to know... Franco Nevada and Royal Gold are great companies, sure. But they've been around for more than 20 years. Yes, they still make investors decent money, but the days of 1,000% gains, I'm afraid, are probably long gone. But here's the good news: There is now another chance for you to make absolutely astonishing gains thanks to this incredible business model... What very few investors know is that in 2003, a small group of investors with a ton of experience in the mining business got together. They were led by a 28-year industry veteran... who has done all types of important work in this industry... from exploration geologist to mineral economist. This savvy industry veteran helped form a new royalty company—just like Franco Nevada and Royal Gold. They now own royalties on mines in the U.S., Canada, Chile, Spain, Australia and South Africa, to name just a few. And... they've done something else... which I believe could ultimately make them even more profitable than Franco Nevada or Royal Gold...You see, Franco Nevada and Royal Gold focus almost exclusively on gold mines. Yes, they diversified with various mines around the world, but they live and die based on the price of gold. However, the company I want to tell you about decided to also diversify into even rarer precious metals... this way they would have even less risk, as precious metals prices fluctuate. For example, this company owns royalty interests on gold, copper, cobalt, silver, uranium, and even diamond mines. This company has six huge things going for it, which I believe will make it one of the safest and most profitable stocks in the world over the next few years... By investing in these companies, you get exposure to the world's most promising gold, silver, diamond and natural resource mines – with more being added to the portfolios all the time. 1) THE BEST BUSINESS MODEL IN THE INDUSTRY The royalty business model is a proven winner with little risk. Franco Nevada was able to turn every $5,000 invested into over $1.6 million. And while most stocks got slaughtered last year, Royal Gold returned investors 65%. The company I'm sharing with you now, was already up 129% within two years of going public. 2) 20 YEARS OF "WORRY-FREE" INCOME The company I'm recommending you buy owns royalties on some of the most profitable mines in the world for the next 2o years. One of these nickel mines, located in Canada is expected to produce for another 25 years... until 2034. When asked about the company's policy of investing in mines with long and stable life spans, the CEO said this... "Don't bring me one of those three or four year gold deals and tell me its the best thing since sliced bread, because its not. I'm looking for deals that have 20-year lives or longer".3) THE PRECIOUS METALS BOOM Over the last few years, precious metal prices have skyrocketed. And with the Federal Government flooding this country with trillions of dollars, prices will likely continue to increase thanks to inflation. In fact, since 2003, gold has increased over 260%, copper has increased 207% and silver has increased 171%. There is simply no better way to play this bull market over the next few years than owning super-safe mining royalties on the world's most precious and valuable commodities. 4) FRUGAL MANAGEMENT I want to own a business where the guy in charge is efficient, frugal, and saves profits for shareholders--not lavish corporate events or furnishings. That's one of the reasons why I love this new Colorado royalty company. During a recent annual review of expenses, for example, the CEO noticed that air travel costs had increased significantly. He decided to install video conferencing to save money on airfare and said, "Despite a high-margin business model, [the company] has not lost its cost discipline." And get this, despite being a $250 million dollar company, the firm has only 11 employees. 5) LOW RISK This new Colorado royalty company I'm recommending you buy is well diversified. They own 85 royalties on mines around the world, and the majority of these mines are in stable, developed countries such as the U.S., Canada, Australia, and Spain. Also, they diversify among precious metals such as gold, copper, cobalt, silver, nickel, and uranium. 6) YOU ARE GETTING IN EARLY This might be the most critical point about this investment. This new Colorado royalty company has been around only since 2003. The share price is still well under $5. And the company is in the works of producing some incredible deals for shareholders over the next few years, including... A copper and gold mine in Spain, for example, is expected to produce for the next 15 years, and a mine in Nebraska should produce for 20 years. The point is, this company is already an incredible investment, and over the next few years, it is set to pay investors a fortune. I believe you could invest today and watch your royalty gains pile up to extraordinary sums... for years and years to come. And because I want you to get in early while there is still a chance to make massive gains on this new royalty company, I have written a Special Report called "One Investment That Can Pay for Your Retirement". I'd like to give you access to this report for FREE. It will show you how to buy this company... the ticker symbol... the price to pay... and why you can look forward to a decade or more of huge gains. I'll go into very detailed valuation, which shows you exactly why I believe this business is one of the few safe "buy-and-hold" stocks in the world today. It's an incredible value... with very little risk... which could pay you hundreds and hundreds of percent gains over the next few years. Let me show you how to get your FREE copy today of my research... My name is Dan Ferris. I'm the editor and analyst of Extreme Value, an investment advisory letter that focuses on the safest and cheapest stocks in the market—such as the royalty company I just mentioned to you. My "Extreme Value" strategy offers what I believe is the single best way to make money in the stock market today... by using only the safest and most profitable investments. Often times, I'll spend up to six months researching a stock opportunity... because I won't make a recommendation unless I find it almost impossible to lose money. For example, a few years ago I flew to the island of Maui, rented a car, and toured 37,000 acres of sugarcane fields owned by a company called Alexander and Baldwin (symbol: ALEX). I was accompanied by John Moxie, the company's Vice President of Farming Operations, who showed me each stage of the sugarcane growing process. After the tour, I went to the Maui Real Property Assessment Division where I found 242 tax records filed under Alexander and Baldwin's name. I discovered that the real assets owned by the company were selling on the stock market for a small fraction of what they were actually worth on the open market. Specifically: The company owns 90,600 acres of Hawaiian land, most of it on the islands of Maui and Kauai. And almost all of it is carried on the company's books at its original average cost of just $150 an acre. Today, some of that land is worth in excess of $1 million per acre... That's what I call an "Extreme Value" situation. Of course I recommended this company to my readers who could have seen gains of 154%. I expect we'll make considerably more over the next few years as well. In short, I've spent the last several months doing the same type of in-depth research on this new mining royalty company, which I believe could single-handedly pay for your retirement in the next few years. And the good news is... there are several other incredible "Extreme Value" opportunities out there right now... For example... of Dollars Thanks to The Tax Man My research for Extreme Value focuses on finding extraordinary opportunities to make very large gains... with almost no risk. Well, recently, I've found an incredible way to profit, thanks to the tax system. In short, I've found an investment that is better than government bonds, municipal bonds, or just about any savings vehicle on the planet. I expect you could get paid about 50%-100% on your money over the next few years... with as little risk as is possible in the investment world. It's all thanks to something I call "Tax Revenue Shares," which could potentially pay you a small fortune on about 16% of the tax revenue paid in the U.S. Some investors have been taking advantage of these "tax revenue shares" for years and have already seen gains as high as 923%. Even Warren Buffet, the greatest investor of the past 50 years has held this investment, and at one time owned more than $10 million worth. We all know that the only things certain in life are death and taxes. But most investors don't have a clue about how to turn the tax system in their favor. Keep in mind: The payouts from the "tax revenue shares" I'm going to tell you about have increased in value 23 of the past 27 years. Don't get me wrong: These "tax revenue shares" will not pay you 500% in one year. Rather, they are a super-safe investment, perfect for your savings, which could pay you a heck of a lot more than any bond or savings account I know of. Remember, no matter what happens in the economy or the stock market, people have to pay their taxes. And this is how you can get your share. And I haven't even told you the best part: You can easily buy these "tax revenue shares" through any ordinary stock broker, or on-line brokerage account. It couldn't be easier. I've written a report covering everything you need to know about these "revenue shares" called, How to Make Safe 50% Gains From "Tax Revenue Shares." Again, I'd like to send you this Research Report immediately, and free of charge. The research on "tax revenue shares" and the incredible opportunity in the new mining royalty company are actually the first things I'll send you when you take a risk-free look at my monthly advisory letter, Extreme Value. This research will help you decide whether or not Extreme Value is right for you. Here's what I mean... Extreme Value is not for the average reader.
And keep in mind: We found these huge gains while focusing on the safest "Extreme Values" in the market.
If you decide to take a look at my work, you will be in good company. What I mean by that is, not only do every-day readers follow my recommendations for big gains, but so do many professional investment managers...
If you'd like to give Extreme Value a try, I believe very strongly that you will not be disappointed. I think you could safely make more money with my work than you've ever made following any other financial advice from any source.
The Finest Beachfront Property in The U.S. What if I told you that, thanks to the real estate collapse, you could now own some of the nicest beaches in all of America... for the equivalent of one hundred dollars per acre...
The point is, this is a way to get in on America's best real estate, at dirt-cheap prices. I think you could safely double you money over the next few years... And probably make many, many times that over the next decade and beyond. How to Get Your Trial-Preview Normally, we charge $1,000 per year for my monthly research.
To get started, and to get instant access to all of the investment research I described in this letter, Subscribe Now Good Investing, Dan Ferris Editor, Extreme Value August, 2009 P.S. Remember - we're making this special 50% off preview price available to you for a limited time. If you've ever wanted to try Extreme Value, there has never been a better time than now. See the order form on the next page for our No-Risk money back guarantee. |