NIA updateThe performance of NIA's most recent stock suggestions has been absolutely unbelievable!
NIA's second to latest stock suggestion was Mega Precious Metals (TSX Venture: MGP) on May 18th at
.37. We said in our original report about MGP that we considered the stock to be extremely undervalued below the price of
.80 where the company raised $11.5 million in a private placement in February.
We highlighted how MGP's Monument Bay property had an inferred gold resource base of 1.212 million ounces of gold and how the market was valuing MGP's gold resource base at only $14.43 per ounce. An infamous stock broker who makes a living by charging his clients rip-off commissions of 3.5% to buy or sell a stock, criticized NIA's profile of MGP saying that an inferred resource base means nothing, with inferred being the lowest resource category. NIA explained to its members that if you bought a stock that already had its gold in much higher categories, the stock would most likely be fully valued. We said that the key to successful investing is picking the right gold stocks that will soon see their gold resources upgraded to higher categories. We then said to let the performance of MGP prove to you who is for real and knows how to pick stocks, and who is phony and fake when it comes to investing in stocks. We even said, "NIA is extremely confident MGP will become a huge winner. In fact, we bet our reputation that it will become a huge winner from its current price of
.47".
Just a few weeks later MGP announced that it grew its Monument Bay gold resource base by 47% to 1.779 million ounces, with 503,188 ounces of gold reaching the indicated category (the next category up above inferred) and 88,905 ounces of gold reaching the measured category (the next category up above indicated). MGP soared to a high in July of
.79 (we gave an outlook of
.80 in our original profile) for a gain of 114% from our suggestion price. Later in the month as investors deservingly took profits on MGP, the stock dipped by 35% from its high to a low of
.51.
On August 4th with MGP at
.64, we discussed how the market was valuing MGP's gold resource base at only $23 per ounce and said that "we believe the big move to the upside is still to come". We went on to say, "Major catalysts are ahead for MGP that could send the stock soaring above its recent high of
.79."
On August 9th with MGP at
.68, we said, "MGP is expected to next month release their resource update for North Madsen. NIA believes that MGP is likely going to report its first major gold resource from North Madsen. It is possible that MGP will grow its North Madsen resource base from approximately 40,000 ounces of gold to approximately 1 million ounces of gold, with 300,000 ounces of gold being added to the measured and indicated categories."
NIA was right about its August 4th prediction of MGP soaring past its high from July of
.79. MGP skyrocketed to a high on August 15th of
.93 for a gain of 151% since we first suggested it three months earlier at
.37.
NIA was also right about its August 9th prediction. In fact, MGP blew away NIA's highest expectations. MGP grew its North Madsen resource base from approximately 40,000 ounces of gold to not just 1 million ounces of gold, but to an unbelievable 1.316 million ounces of gold. Not only that, but MGP added 937,167 ounces of gold to the measured/indicated categories, more than TRIPLE our prediction of 300,000 ounces.
Since the time we first suggested MGP, they have grown their total gold resource base from 1.248 million ounces of gold to 3.095 million ounces of gold, an increase of 148%! MGP has also gone from having 97.5% of its resource being inferred, to now having 49.4% of its resource being measured/indicated, with 58.4% of its measured/indicated resource being measured.
If we value MGP at $100 per measured ounce of gold, $50 per indicated ounce of gold, and $25 per inferred ounce of gold, and add in MGP's $6.81 million cash position, MGP would deserve a market cap of $167.062 million or $2.18 per share.
MGP at its current price of
.54 has an enterprise value of only $34.581 million. With a total resource base of 3.095 million ounces of gold, MGP is currently being valued at only $11.17 per ounce of gold, well below its valuation of $14.43 per ounce of gold when we first suggested it at
.37. MGP's valuation per ounce is at a new record low at a time when it should be at a new record high, being that MGP's total measured/indicated gold resource base has increased from 32,000 ounces to 1.529 million ounces, about a 48-fold increase. NIA has just accumulated 60,000 shares of MGP at an average price of
.5315. This is the first time that we have ever owned stock in the company. Our original suggestion of MGP was completely unbiased.
From the time NIA first suggested MGP in May at
.37 to its high three months later of
.93 for a gain of 151%, MGP was the best performing gold stock on all U.S. and Canadian exchanges.