Reprinted from the current Issue of The Prospector
As publisher of The Morgan Report, in the process of making an almost two year’s long study, we featured a new technology company in the microcap category that could change the mining industry. First and foremost, we usually don’t spend much time in this part of the Resource Sector, because frankly, the risk tends to be significant, without a commensurate ability to define a company’s potential. In other words, reaching a point where we have arrived at a realistic reward-to-risk metric.
However, we do keep an open mind. So when an intriguing story came our way, we spent serious time investigating, and finally recommending it to our subscribers, as a speculative investment…with unusual potential.
The company carried out its stated plan, but due to a “fly in the ointment” beyond its control – having nothing to do with its technological progress – the stock itself did poorly. In fact, it sat out last year’s January – August, 2016 barn-burner rally, during which most other resource sector stocks moved sharply higher. It even managed to trade at less than half the price that I, David Morgan, had paid for what I was judging as a ground-level opportunity.
Nevertheless, I have learned to leave room for a reappraisal, if and when new information comes my way. This trait – developed from many years of balancing skepticism with curiosity…and common sense may have presented my subscribers – and perhaps you – with a situation that contradicts the old saw which says “it’s too good to be true.”
Here’s where the story gets interesting. In performing the final phase of our due diligence on the project, and with the TMR team visiting their lab at our expense – the CEO told me about another aspect of his work. It was so intriguing that, even though prohibited from taking pictures or notes, and being sworn to secrecy, I stayed an extra day to meet with the chemist.
I witnessed their patent-pending “chemical solution” which can be used in the extraction of gold from certain types of ore bodies, functioning exactly as designed, without causing ANY harmful effects. The solution is inert – the ingredients are actually classed food grade quality! The process is similar to a cyanide circuit, but simpler and safer. It involves partitioning precious metals into an aqueous solution followed by extraction, using conventional methods like electrowinning, carbon absorption or precipitation.
Some of the benefits to operators include: reduced environmental impact, a broad applicability spectrum, an accelerated permitting process, access to deposits in cyanide-prohibited mining jurisdictions, reduced operational cost, not to mention improved occupational safety and reduced tailings emissions.
But for now, the most exciting potential may be in the Electronic Waste (E-Waste) sector, where gold (as well as silver, platinum and palladium) recoveries, classified in grams per tonne of processed material are far superior to the best gold mines on the planet. Ongoing E-Waste testing, using the reagent, is verifying and enhancing throughput yields. In fact our Senior Analyst, David Smith and I recently made a flight to Vancouver, B.C. to meet directly with the company chemist, and watched precious metals literally “fall” out of the solution.
Great for refining Gold ore and E-Waste; Safe for the Planet
Here’s the Bottom Line, with two caveats. First, this opportunity is for aggressive accounts who understand what we teach – which means that it is highly speculative, best approached with money you can afford to lose. Second, the analysts at The Morgan Report and I already own stock in the parent company, and at some point may buy more.
The “core” details: You must be a shareholder of record by around the first week or so of March 2017. For every TEN shares owned in the parent company, you receive approximately ONE share in the new (spinoff). We’re all on the same playing field, because just like you, I myself can buy into the parent company in the open market, at the same share price.
You may be wondering… So, how good is the parent company? The exact details can be found in the February Issue of The Morgan Report, modified here—
Question to the Editor: David, after the spinout takes place, do you still have high hopes for the parent company? Could its stock suffer if people buy the original operation just to get shares in the new one and then sell? – Thanks, Greg
My response: We agree that some may choose to sell parent company shares after obtaining the new spinout. And yes, the mobile mill concept’s development has been slower than anticipated. However, when we made that special trip to Vancouver to witness the new chemical process, we also took time to see what improvements were being made with the parent company’s unique, mobile ore-refining platform. I met with a UK engineer who has an impressive patent-pending process that virtually eliminates the need for expensive and space-consuming ball mills (ore crushers).
Personally, I view the parent company favorably. How well its share price continues to be received by the market as the new one goes public is anyone’s guess. But as things currently stand, I intend to hold onto my shares. After all, the company will be using the new reagent in its own gold-refining process. This could turn out to be a case where the whole (both companies) – “is greater than the sum of its parts”.
The Wrap: So, how does the value proposition for this “outside the box” mining sector company story strike you? Don’t let indecision or the fear of taking action keep you from doing further research while “the price is right”. This kind of “plan your work; then work your plan” behavior is one of the main themes in our new book Second Chance: How to Make and Keep Big Money during the Coming Gold and Silver Shock-Wave. In fact the company we’re discussing is just one of seven that we profile! We’re here for you, through our books, our interviews, consultations and especially, our monthly letter.
David Morgan is a widely recognized analyst in the precious metals industry; he consults for hedge funds, high net-worth investors, mining companies, depositories and individual investors. He is the publisher of The Morgan Report, and a featured speaker at investment conferences in North America, Europe and Asia.
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