“Huge Upside Idea” Update

(note:  This report was first published on June 25th.  Many of you have already purchased it.  This is an update/briefing on my breakfast meeting with the upper management yesterday – the bottom line is that this stock is an even stronger buy now than it was just 3 months ago based on the advancement of the project that the Company has achieved since mid-June).  I just added shares to my fund.

The company featured in the titled stock report was in town for the Denver Gold Forum.  I had a 1-on-1 breakfast this morning with the founder and Co-Chairman,  the President/CEO and the VP of Corporate Communications.

This Company is sitting on a massive deposit in a low-risk jurisdiction,  has plenty of cash and its Preliminary Economic Analysis shows that the NPV of the project is 5.7x greater than the current market cap.  It’s nearly 12x greater if you subtract out the cash.  The PEA assumes $1300 gold and $20 silver.   Imagine the NPV of this project when gold and silver move back up to their highs in 2011…

Furthermore, since I last visited with the Company back in June, they’ve identified ways to reduce the CAPEX number used in the PEA.  This would further boost the NPV.

This is a largely “de-risked” project and, with a deposit as enormous as the one this Company is sitting on, my bet is that – once the metals start moving a lot higher – it will be taken out by large mining company at a price that’s several multiples higher than where it trades now.

Finally, when I had this same breakfast last September, the founder/Co-Chair was boasting that he had purchased more stock at a lower price than any other insider.  With stock the having been beaten up since mid-July, I asked him if he was planning on buying more stocks.  Not only had he already added to his position this month, CEO had purchased shares yesterday and the VP was getting ready to buy more.  These people are buying open market shares with their own cash (unlike homebuilder executives, who exercise compensation options and dump them immediately).    I added today to the already heavily over-weighted position in the fund I manage.

If you already purchased this report, feel confident about adding to your position.  If you have not purchased this report, you can do so by clicking here:   Huge Upside Idea  or on this graphic:

If you buy just 5,000 shares of this stock (well less than $5,000) and it goes up just a nickel, you will have already earned 10x your investment in my stock report.

6 thoughts on ““Huge Upside Idea” Update

  1. Dave – We’ve corresponded before, I really enjoy some of your reports and hope you are making some cash on them. 2 quick suggestions – could you number them or something and then have that number on the documents? I have no idea if I’ve bought the “Huge Upside” report. Also, great work on the homebuilders – appreciate how you worked through those footnotes, what I need to do more….

    Lastly, if you ever are bored, you could throw together a premium report where you discuss/walkthough some of the mining metrics/valuations methods you like, as you mention on the last page of the glossary “several complicated variables”. I follow info pretty well, but have always had a hard time grasping some of the finer points of mining – but sometimes think Doody’s metrics are too basic, you can’t just lump these guys together.

    Thanks again for all you do!

    1. Thanks for the feedback. I’ve been meaning to put some better organization on my report pages. I guess I could tag the reports
      with the logos I use on the webpage. My valuation methodology is proprietary to my work and I use it for the stocks I select
      for the fund I manage. I’d hate to make it available even with a price on it, as it would be unfair to the investors in my fund. So
      far every stock I’ve featured in research report list we own in the fund.

      Doody is lame. In my opinion he’s a charlatan.

  2. Dave, would you give us a comment on Lennar’s earnings report and the pop the rest
    of the home builders saw this morning.

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