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Our favorite pick in the gold mining space is attempting to recreate history.
Back in March, Money Morning Executive Editor Bill Patalon told readers about a unique gold mining company that is miles ahead of its competitors: Goldcorp Inc. (NYSE: GG)
“You should without a doubt not only own gold, but also own some gold miners. I believe Goldcorp is the best mining company to own right now,” he said. “Its past shows that it has the ability to innovate and come out stronger on the other side.”
You see, in March 2000, the company launched the “Goldcorp Challenge.” Goldcorp put up $575,000 and essentially said “Tell us where to drill.”
The response was incredible.
14,000 people from all walks of life showed up from over 50 countries around the world. Physicists, students, military officers, engineers, geologists - anybody you can think of…
Pundits touted the challenge as a disaster, predicting that it would expose the company to a hostile takeover – but the joke was on them. Goldcorp ended up with geological and target data that it had never had access to before.
As a result of the contest, Goldcorp pulled over $3 billion worth of gold out of the ground over the next seven years. The whole thing turned Goldcorp from an afterthought into one of the leading gold miners in the world today. By the end of 2007, its stock price had soared 605% – absolutely crushing the S&P over the same time frame.
Now it’s at it again with a new challenge. This time, the company is putting up a staggering $1 million. And the end result for Goldcorp could be even more profitable than that of the last challenge…
#DisruptMining 2018 Will Put Goldcorp Back On the Map
Goldcorp just announced the details of next year’s #DisruptMining innovation expo.
Held for the first time earlier this year, this event is a “Shark Tank”-style challenge that brings thousands of entrepreneurs, engineers, scientists, and inventors from all over the world to Canada for a live competition.
As host of the competition, Goldcorp will offer an about $780,000 (or $1 million Canadian) investment to the winner of the challenge for a proof of concept at one of Goldcorp’s mines, or direct investment in the winning technologies, according a Nov. 27 press release.
Hosting the competition allows Goldcorp to get a first-hand look (and possibly a leading role with an investment) at the most cutting-edge technologies designed to “disrupt” the mining sector today.
While it’s certainly a smart move on Goldcorp’s part, it’s not the company’s only effort to get ahead.
Related: This Precious Metal Will Make Investors Rich – Don’t Wait to Check Out These Two Life-Changing Companies
“This is just the latest in a string of efforts the company is making to get an edge on the competition,” said Bill. “The company has pledged over the next five years to increase its output, its production, and its reserves by about 20%.”
Here’s how Goldcorp plans to hit that target…
Goldcorp’s Triple-Threat Strategy
The company has put forth a “three-point plan” for long-term growth:
- Boost earnings
- Slash costs
- And line up growth opportunities – particularly for long-term growth
And so far, Goldcorp has made progress on all three fronts.
Let’s take a look…
This past October, the company reported Q3 earnings of $111 million, or $0.13 a share.
That’s way ahead of the $0.10 a share analysts were expecting. And it’s nearly double the $59 million the company reported in earnings in Q3 2016.
The lower you can get your costs, the more money you can make with each ounce of gold you pull out of the ground.
Miners have one figure that compares all companies on an “apples-to-apples” basis. It’s called “all-in sustaining cost,” or AISC. The lower the AISC, the more efficient the miner. Goldcorp’s third-quarter AISC were $827 an ounce. A year ago, that number was $936. That means it’s cut its costs by about 11.6% in a year – and it’s going to keep cutting them.
The goal is to get down to $700 an ounce by the end of the decade – and at this rate, it’ll get there in just over a year.
If it continues to get this number down, that means that every ounce of gold it pulls out of the ground is going to be more profitable than the last one – which is great news for shareholders.
Lining Up Growth Opportunities
Last July, Goldcorp grabbed Kaminak Gold Corp. for $373 million – and with the deal, acquired the robust Coffee Gold Project in Canada’s Yukon. At the time, Petroleum News referred to the Yukon as “one of the best places on the planet to seek and develop a mine.”
Then, at the beginning of March, Goldcorp contrived a $4.75 million “private placement” deal with Triumph Gold Corp. (CVE: TIG), giving Goldcorp a 19.9% stake in Triumph. As part of the agreement, Goldcorp has essentially a “right of first refusal” in future deals so that it might maintain its ownership percentage in Triumph.
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And finally, in a recent move, Goldcorp and Barrick Gold Corp. (NYSE: ABX) announced that they are partnering on a gold and copper deposit in Chile. This move has huge profit potential, as Goldcorp and Barrick are Canada’s two biggest miners. As part of the deal, Goldcorp will assume 25% of the Barrick-run Cerro Casale project in Chile.
“Industry insiders (miners, not financial analysts) have lauded these Goldcorp moves as shrewd, forward-thinking, and strategically inventive,” said Bill.
Add to that the upcoming #DisruptMining 2018 challenge, and you’ve got a company that’s absolutely lethal in this space.
“Goldcorp’s decision to participate in another innovative challenge, coupled with its growth strategy, just goes to show how far this company is willing to go to get an edge and prove it’s the leader here,” said Bill.
“Just to be clear, I don’t see the stock skyrocketing from here as a result of this challenge,” said Bill. “But that doesn’t mean you shouldn’t look to invest for the long term.”
“This challenge is just another example of how strong and innovative the company is, and I’m expecting even more great things from this company over the next decade.”
Bill Just Uncovered Your Next Profit Opportunity
Before Bill moved into the investment-research business in December 2005, he spent 22 years as a journalist, most of it covering financial news as a reporter, columnist, and editor for outlets such as Gannett Co. Inc. and The Baltimore Sun.
He has covered finance and investing, economics, manufacturing, the defense sector, biotechnology, and telecommunications. The companies he's covered include Eastman Kodak Co., Xerox Corp., Harley-Davidson Inc., Caterpillar Inc., Westinghouse Electric Co. LLC, Verizon Communications Inc., MedImmune LLC, and Black & Decker Inc.
His most memorable interviews include former U.S. President Richard M. Nixon, General Electric CEO John F. "Jack" Welch, and Forbes magazine publisher and former presidential candidate Steve Forbes.
Along the way, he earned the esteem of heavyweights like Anthony Gallea, senior portfolio management director at Morgan Stanley, who collaborated on Patalon's groundbreaking 1999 book, "Contrarian Investing."
Bill’s ideas so impressed Jim Rogers that the hedge fund genius eagerly wrote a glowing, six-page introduction to the book.
A winner of approximately two-dozen journalism awards – including top honors from the Associated Press and the prestigious Society of American Business Editors and Writers (SABEW) – Patalon has had his work featured in Kiplinger's Personal Finance magazine, USA Today, and The South China Morning Post, among other publications.
Before taking over Money Morning, he served as the editor of The Rebound Report, an investment newsletter focused on turnaround stocks.
Patalon has a bachelor's in Print Journalism from Penn State University and an MBA in finance from the Rochester Institute of Technology.
Yes, he's uncovered a lot of investment stories. And he's even been nominated for two Pulitzer Prizes.
But even he believes the story he’s uncovered now could be a once-in-a-lifetime opportunity…
Get on the Ground Floor of a Potential $235 Million Windfall with This One Company
It started in early 2016, when millionaires, billionaires, hedge funds, institutional investors – all the bigwig players on Wall Street – began searching for a safe place for their money... one that would keep their billions protected from the volatile market extremes we saw earlier that year... but also a place where they could still make decent returns.
What they found was a global economic mess, beginning here at home.
As if that wasn't bad enough, you have the scourge of negative interest rates popping up all over the world, which means you have to pay the bank to hold your money – not the other way around.
So instead of putting their money into T-Bills or dividend-paying stocks, big-name investors poured their money into gold by the ton.
They were forced to, as global currencies were being crushed across the board, and negative interest rates guaranteed they would lose money.
Turns out that piling into gold wasn't too bad a choice, actually, as indexes like GLD zoomed 16% last year– beating all the major indexes combined.
The price of the metal itself had skyrocketed as much as 30% since December 2015.
The resulting anomaly is bound to mint another generation of millionaires…
Because so many investors poured so much money into gold – and gold spiked so high so fast – it opened the door for this ultra-rare but powerful anomaly to occur, where another precious metal – one that, like gold, is often considered a safe-haven "currency" – got "temporarily left behind."
We’re not talking about silver... In fact, silver also saw a big spike after Brexit, when investors plowed into precious metals for protection from falling currencies.
Rather, we’re talking about another precious metal that is exceedingly rare – 30 times rarer than gold – occurring at a concentration of only .005 parts per million in the earth's crust.
In fact, it's so rare that all of this metal that's been produced in the entire history of man would only cover your ankles in one Olympic-size swimming pool!
And unlike gold, this precious metal is extremely important for a host of other things besides jewelry and stores of wealth.
That's because it contains a myriad of chemical properties – properties that can help turn auto emissions into carbon dioxide and water... extract gasoline from crude oil... enhance magnetic properties... convert ammonia to nitric acid... and can be found in anti-cancer drugs and infrared detectors.
As a result, this rare and precious metal can be found in everything from catalytic converters, to pacemakers, to chemotherapy drugs and other lifesaving medicines, to fuel cells, glass, and more.
Which is why industrial demand consumes 50% of annual production, as nearly everything we use or manufacture either contains this metal or requires this metal for its own production.
We’re talking about platinum.
Make no mistake: This anomaly has the potential to be HUGE... and the time to start positioning your portfolio into platinum is right now.
To understand why the gold anomaly has the power to make you so much money by investing in platinum, you have to understand the relationship this rare precious metal has with gold.
They have a very special relationship insiders call the “gold/platinum ratio.” The anomaly Bill has identified occurs right smack in the middle of this ratio.
Because platinum is about 30 times rarer than gold, it's usually the more expensive of the two metals. It's even earned the name "rich man's gold."
But right now, in an exceedingly rare situation, the ratio is reversed, and gold is the more expensive metal.
As a result, Bill’s projections show that the ratio will return to normal and platinum prices will explode like fireworks on the Fourth of July.
If you want to get in on this anomaly and grab your chance to make a mint in platinum in the next few months (and beyond), you need to act now.
And Bill’s discovered a way for you to cash in ASAP.
You see, the last two times this gold anomaly hit, small platinum miners were the biggest winners. Taking a stake today in a little-known platinum mining stock Bill’s just discovered could make you a millionaire before the ratio reverses itself... and a multimillionaire down the road.
The company plans to produce 91,500 ounces of platinum group metals the first year, ramping up to a full capacity of 250,000 ounces per year by year four – and continuing that production for the next 20 years.
Based on our projections, that comes to $86,925,000 in revenue the first year and roughly $235.7 million every year after that.
Yet, despite its vast holdings, the company’s market cap is a shockingly low $48 million.
If the stock were valued at $20 billion, our calculated value of its resources and reserves, its stock price would be closer to $100 a share instead of the pennies it’s trading for now.
Since we're talking about a tiny company – trading for under a dollar — it's likely to experience some volatility.
But it's exactly this type of situation that can lead to the biggest, truly life-changing gains.
Investors positioned properly before the second mine goes "live" will likely see the biggest gains on their tiny share price.
And just like Halley's Comet, once this opportunity is gone, you're not likely to see it again for a long, long time.