New Orleans investment conference sparks discussion on gold, the Fed, and swine flu.
NEW ORLEANS – “We are a pure gold play,” says the CEO, a very large person and a former college footballer for Holy Cross.
With that, James Moore of Inter-Citic Minerals (TSX: T.ICI, Stock Forum) just might have kicked off (actually he was on the football team’s offensive line during the mid-1980s glory years) a theme that out-toots even the mention of rare earth elements these days.
“We are sure as heck not going to be downgraded one day because, say, gold is up and copper is down,” says this engaging man, who fills a New Orleans hall with booming voice that matches his heft and his height.
Gold – the prospect of pure ore with no metallurgical issues, no byproducts and no geopolitical strings attached – drew a metric-savvy crowd to New Orleans’s 35th Investment Conference. I think it is the prospect of $4,000-ounce gold (see below) that is moving the people meters these days.
Mr. Moore’s Inter-Citic Minerals is undersized these days. You can see how this bothers a massive man. Inter-Citic is developing a large gold mine on the high plains of eastern China: the Dachang Gold Project. Yet Dachang has yet to go bada-wada-ching. The ICI stock in Canada sells these days for perhaps $25 an inferred ounce. That’s half what the shares fetched during the Canadian prospector’s last institutional raise.
Why such a tiny market cap for a company that promises a two-year payback on a fully assembled and producing mine? Why chump Dachang change (0.3 percent of net asset value) for a company that is building that mine for just $102 million – giving it an internal rate of return of 40 percent, and even higher if one prices gold at $800 an ounce?
Lots of reasons; none of ‘em good. “Hey, thus far the drilling part has been easy pickings,” says Moore, who has been at this Inter-Citic thing for more than 10 years. “Our average drill hole is 100 meters. Right now, we’re having our greatest success with a shovel.”
Coming from the mouths of some resource execs, well, you know the old joke about the golfer and the miner: the only difference is the miner gets to improve her “lie.” But from Mr. Moore, the shovel is not full of Dachang dung.
I am not going to go into the rest of the story right now, just introducing it. There shall be more. Right now, I’d rather tell some New Orleans tales that will get you thinking about the Federal Reserve, gold and the H1N1 truth.
Gras oro – fat gold in New Orleans
"What a difference a year makes. Remember the fear from last year? The desperation?"
With that, Jim Blanchard acolyte Brien Lundin, drawling his Louisiana vowels, introduced this 35th New Orleans Investment Conference.
Mr. Lundin’s words were perhaps the few in four days fit for a PG-rated audience. A lot of the rest was raunchy and scrumptious. I loved it with LOVED in caps.
Gracious and grammatical exceptions to the Parental Guidance material at this spanking show included Bob “Elliot Wave” Prechter, Wits Gold (TSX: T.WGR, Stock Forum) aristocrat Adam Fleming and sweetly enough, financial broadcaster and Chicago futures maniac Rick Santelli, who still managed to shout his way to a Guinness new decibel record for the longstanding New Orleans show. These three in particular and several others deserve Austrian cult wine credits for their contributions to the biz of mining investment: for my money Dr. Marc Faber, Frank Holmes, Rick Rule and Doug Casey. They were worth every plug penny, and I intend to make a metric ton of money off their comments.
This thing was raucous? Oh yeah. Just check the clip from Doug Casey’s debate with former Governor Howard Dean and former White House strategist Karl Rove.
- Discussing Medicare, government ballooning, life/the universe/everything, Doug Casey was on thrusters: “You guys are Stalin and Hitler.”
- Mr. Rove, quick witted as ever even with the GOP flagging in D.C. these days: “So who is Stalin and who Hitler, Doug?”
- Mr. Casey, crusading as always to rid our galaxy of politicos, be they Demos, GOP or Commie: “Stalin and Hitler both liked kids and dogs.”
So take that. And they did. Dr. Howard Dean, former Vermont governor (he is also a medical doc) and Mr. Rove of the George W. Bush White House: they took it and smiled wanly.
On the gold front, the New Orleans bash was top of the mark. Its attendees numbered anyone and everyone who sees precious metals as bankable currency.
This time around (I had not been a speaker here for several years), I received actual applause instead of snorts for my long-held pronouncement, with fortifying charts and data, that gold will reach $4,000 an ounce or more in one year. (Also, that silver will climb above $500 an ounce as it closes the percentage gap.) Now that fundie Peter Schiff, BLESS HIM, and others are saying it, I suppose I deserved a clap in the face.
Someone else who deserved a clap in the face and made our Stockhouse audience and our Ticker Trax subscribers huge bucks this month was Gene Arensberg, who with Brien Lundin produces his “Got Gold Report” EACH WEEK. We have the proof: read this Thom Calandra article from April about Timberline Resources. Shares of Timberline (AMEX: TLR, Stock Forum) have quintupled since our Gene Arensberg-inspired examination of the driller and Montana prospector. These shares are now one big Butte, if you catch the drift. Mr. Arensberg, who presented one of the most interesting workshops here – Gaming The Newsletter Writers – has our applause.
So does Ron Paul, the congressman from Texas. You see, precious metals are threatening to replace paper for commerce and bankable wealth, maybe for the first time since America’s Revolutionary War 230-odd years ago.
This conference traces its investing roots back to the late Mr. Jim Blanchard’s “Free Our Gold” campaigns against the Nixon, Ford and Carter White Houses. Speaker Ron Paul, the “END THE FED” author and presidential aspirant, has been attending this Cajun free-for-all more times than his wife, Carol, can recall. I just finished the brand-new anti-Fed book, and I even got a cocktail party seven minutes with Ron and Carol Paul.
Dr. Paul, who is like Dr. Dean a medical doctor, did not agree with my take on the H1N1 viral threat. But hey, that is trivial compared to the way central bank interventions in gold, currency and other markets seem to be backfiring these days, right?
Perhaps. Independent Ron Paul’s “END THE FED,” mirroring what GATA.org’s [Gold antitrust action committee] Bill Murphy and Chris Powell (and Austrian economists) have been explaining for seemingly-ever, has a bushel of references to more than 100 years of academic script about the sensibility of paper currencies (zero) vs. the promise of gold reserves (ding ding ding!). It’s a snap to digest, too, even with the footnotes.
As for that virus thing, well, to be fair, we here at home and at Ticker Trax have been following the Type A virus and BioCryst Pharma’s (NASDAQ: BCRX, Stock Forum) peramivir for four years. So my queries to the Pauls might have caught them off-foot, jet-lagged perhaps. Neither of them sees “swine flu” as a threat, except, as Dr. Paul said, “as an instrument the government is probably using to instill fear into the people.”
I do not agree on that account. 
But I do so love almost everything else the good Dr. Paul has to say and write about central banks’ paper extortions and other feats of origami.
(To his credit, Dr. Paul as a congressman in the mid 1970s was one of only two votes against a stockpiling of tens of millions of America influenza vaccines that were never really needed yet caused health problems and some deaths.)
Dr. Paul’s Fed-busting crusade is against central banks’ destruction of $5 trillion (and probably much more) of paper wealth following the disappearing gold reserves that used to back currencies. “END THE FED,” already on best-seller lists, points out how paper wealth and opportunistic market meddling make it easy-peasy for governments to wage war, restrict liberties and perpetuate sharp up and down economic cycles.
To sum up: this counter-culture classic conference in the Deep South is in prime form, and its attendees destined for equity gains last seen on a daily and weekly basis during the Broadcom parabola of nine years ago.
We were fortunate to spend a metric ton of time with about 8 gold and silver companies that are poised to brand their tickers on properties in Mexico, British Columbia, Ghana, Burkina Faso, western China, Colombia and just maybe, South Africa, Arizona and Idaho/Montana.
Each 
of these companies, I have a strong hunch, are as actionable as the Harrah’s Sports Book across the boulevard from our Riverside Hilton conference hotel, that velvet bookie setting a legal line on our weekend’s sellout event: college footballers Louisiana State vs. Florida State. The invaders won.
An early example: Wits Gold (WIWTY and WGR in Canada): I spent much time with straight-shooter Chairman Adam Fleming. I am developing the interview in my “dark room” and look to present the skinny on this gold fatty with deep assets in South Africa’s Witwaterstrand Basin sometime in the next week. Wits could become the best performing gold stock in the world as gold’s price heads toward $4,000 an ounce and higher. The stock just needs to trade a bit more freely than it does in the USA, Canada and even home exchange the JSE in South Africa.
Mr. Fleming, lithe as the last time I saw him 10 years ago in London, is an upper-crust delight, and he is not afraid to tell the “blankity-blank” truth about his company and central banks’ gold meddling. Wits the stock is an exercise in belief: knowing that the tiny company is sitting atop more South African gold, and uranium, than perhaps any Africa producer in the history of that luscious continent. Says Mr. Fleming, a British knowbleman who is in the know, “The clock is ticking on our projects there at Bloemhoek and De Bron. All is in harmony.” Stay mega-tuned.
TORONTO: I’ll be presenting a workshop on “Moly, Mexico Silver and Ghana Gold … and the H1N1 Truth” at the World Money Show in Toronto next Tuesday. It is at 4 p.m. at the convention center.
(Please see:Thom Calandra’s Stockhouse articles.)
* All photos Thom Calandra.
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HOLDINGS: Thom’s holdings are listed for all Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of a number of public and two private companies. With the exception of 63,000 shares of BioCryst Pharma, Thom Calandra owns none of the articles mentioned in this article.
THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch andMarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold.
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