10 Bagger ???“10-Bagger Pick #1? — Small MiningOutfit Turning Trash into Uranium
By
StockGumshoe· June 21, 2010
https://www.stockgumshoe.com/2010/06/10-bagger-pick-1-small-mining-outfit-turning-trash-into-uranium.html
Today we’re taking a look at a stock that’sgetting a fair amount of attention from Andy Obermueller as he throwsout the lure to catch subscribers for his new
Fast-Track Millionairenewsletter. His pick of iCad (ICAD) a week or two ago has shown a bigprice spike (though that could evaporate as interest cools, of course),so I thought folks might like to know about another tiny company he’steasing now.
And I do mean tiny — this is a company with a marketcap of $8 million, so just from Andy writing about it and me mentioningit today it will probably go up, even if we both said mean things aboutthem.
Here’s how he teases it in his recent ad:
“10-BaggerPick #1 — A tiny $8 million company that has discovered $12.2 billionof uranium where no one else was looking….
“It’s a small miningoutfit that is literally turning trash into treasure. I think thiscompany is going to make a killing. Here’s why…
“It has discoveredan ingenious way to extract uranium from coal ash.
“I didn’t evenknow this myself, but coal contains trace amounts of uranium. About 50parts per million. The uranium stays in the ash after the coal isburned.
“This tiny Canadian outfit claims it can extract uraniumfrom coal ash for $35 a pound. The spot price of uranium is about $45 apound.
“So we’re looking at a fat $10 per pound profit.
“Notonly does it have a patented extraction process, it also has acustomer: China. It has signed a deal with the China National NuclearCorporation to extract uranium from a coal dump.
“And let’s beclear: China doesn’t care what the uranium costs, only that it hasaccess to it. China has 21 new nuclear power plants under construction.And they won’t produce a single watt without uranium.
“Luckily forChina, it has 2.7 billion tons of coal ash. Which means they aresitting on 270 million pounds of uranium that only this company canextract for them.
“At a margin of $10 per pound, that’s $2.7billion in profits. You don’t think that will make this penny stock takeoff like a rocket?
“The nice thing about this pick is that italready has a solid gold mining business. So that takes a lot of therisk out of this small stock. Its uranium recovery project is a bonus.
“Ithink this stock has ‘10 to 1' written all over it. It’s a trueswing-for-the-fences play.
“It’s trading at just under 10 cents ashare. At that price you can buy a ton of the stock and have some fun.”
Well,I’d be the last to tell you not to “have some fun” or “swing for thefences” … as long as we all remember that the big home run hitters alsoset strike-out records, and having fun often ends up making you feelworse the next morning.
So who is this? This stock must be SpartonResources (SRI in Toronto, SPNRF on the pink sheets).
And yes, itreally is an $8 million stock — absolutely teensy — so it probablywon’t surprise you to hear that, on the back of this first round ofAndy’s teasing and touting, the shares are already up 10%+ on more thanten times their normal trading volume. As I type, the shares are up toabout 12 cents, but they were “just under ten cents” a week or so agoand hovered around that price for most of May and June, after hitting 20cents over the Winter.
And yes, being an $8 million stock meansthat they aren’t really doing much yet and have many projects in theearly stages — though they do seem to be going through a “refocusing” togive most of their attention to the most promising near-term projects,it appears. Here’s how they describe their status, from a recent pressrelease:
“Sparton is currently rationalizing itsglobal portfolio of projects. Consideration has been given to bothcommodity and market conditions and management’s time limitations.
“Theprimary focus in China is to improve cash-flow at the producing Huajungermanium operations, and complete the evaluation of the GuojiapingExploration Licence which contains a large, shale hosted vanadiumdeposit with associated uranium mineralization. At Lincang, thesecondary uranium recovery program will advance through finishing a bulksample test and completion of a final feasibility study.
“Spartonis extremely well positioned to capitalize on its favourable standingin the Chinese mining industry with additional opportunities beingevaluated on an ongoing basis. All of these projects have a positiveenvironmental footprint and are receiving strong support from all levelsof PRC government.
“Domestically, Sparton continues to exploreits Marmion Gold Project, which is contiguous to the claim holdings ofBrett Resources Inc. (”Brett”), and is located approximately 25 km northof the town of Atikokan in northwestern Ontario.
“Brettmanagement recently announced its intention to recommend a friendly takeover by Osisko Mining Corporation with a view to fund and advance itsHammond Reef deposit, now reported to contain 6.7 million ounces ofgold. The Atikokan area is now being recognized as having excellentexploration potential. Sparton is also continuing its non conventionaluranium and germanium recovery evaluations in western Canada.”
Thecompany has a pageexplaining their coal ash uranium recovery program here, it soundsas though they’re still testing extraction from a specific coal sourcethat has “anomalously high” uranium content. They also have some earlygold exploration projects, some rare earth potential, and some otherpossible projects in their pipeline. As you might expect from a companyof this size, almost every press release they put out contains termslike “financing,” “encouraging,” “preliminary,” “evaluate,” or“potential.” Perhaps it goes without saying, but words like “revenue”and “income” do not play a large role in their releases, at least notyet.
So what do you think? Feel like a little lottery ticket funwith an $8 million stock that’s just getting this unexpected level ofattention, or would you rather wait a while, see if the attention coolsoff, and check back on how their “encouraging” projects are going? Or isthis a little too crazy for you whether it’s at eight cents or15? Let us know with a comment below!