Nautilus Minerals is about to become the first company in the world to commercially drill for gold in deepwater. If it's successful, shares of this stock could jump five times from these levels over the next 24 months... – Frank Curzio, July 2010 issue of Phase 1 Investor
In the middle of last year, Frank put out one of the most controversial recommendations in Stansberry Research's history. Nautilus Minerals was a microcap company that planned to mine gold from the ocean, focusing on offshore Papua New Guinea (PNG) to start.
As we told our readers back then, "If this company's discovery was made on U.S. soil, it would be on the cover of every major newspaper in the country. The field is almost 2,000 square miles in size... about nine times the size of Chicago. It also sports some of the richest gold ores ever found."
People thought this story was pure hype. But Frank did his research. In addition to an incredible story, Nautilus also had great fundamentals...
The company had a strong balance sheet... When Frank recommended Nautilus Minerals, the company had $200 million in cash (over 70% of its market cap) and zero debt. The cash wasn't enough to fund its operations – estimated at $380 million – but it was a start. And the company had some serious investors who could easily raise the extra cash...
Four big insiders owned the company... Barrick Gold, the world's largest gold miner, owned a small stake. Teck Resources (a $17 billion mining company) and Anglo American (a $30 billion mining company) both owned big chunks. And Gazmetall, one of the largest iron ore and steel firms in the world, was the largest shareholder, with 21% of the shares outstanding.
Gazmetall is half-owned by Russian billionaire Alisher Usmanov. Usmanov isn't a stranger to investing... He's invested in Facebook twice, bought a slew of tiny Silicon Valley upstarts, and has money in Russian oil company Gazprom (which is up over 2,000% since 2001).
Nautilus was making progress with the Papua New Guinea government... In January of last year, Nautilus received an environmental permit from the PNG government (a preliminary step in obtaining a deepwater mining permit). Nautilus also signed a deal with PNG Ports in October 2009 to store its ore. And in June 2010, it signed a contract with global drilling services company TS Marine Group, which will provide a vessel, operating crew, and drilling equipment for Nautilus.
In addition to all that, gold prices had climbed over $1,200 an ounce at the time of our recommendation, making Nautilus' plans to mine more viable. (With gold at $1,350 now, they look even better.)
Despite the positives, Nautilus was still a speculation. It had zero revenue. And it was pursuing a business model no one had tried before – mining for gold in deepwater. But it was the perfect Phase 1 stock... a little-known company with a new technology and the potential for massive upside. Frank believed readers could make 500% in two years.
Nautilus got off to a slow start – we're seven months in now and Phase 1 readers are up "only" 40% – but the company cleared a major hurdle last week, sending shares soaring to a 52-week high… Last Monday, Nautilus announced the PNG government granted it a deepwater mining permit.
The permit covers the company's Solwara I Project in the southwestern Pacific Ocean. And the PNG government retained an option to take up to a 30% stake in the Solwara I project as a joint venture partner. The government has one month to exercise the option. If it does, it will contribute funds to the project proportionate to its stake, including its share of already-incurred costs.
The Solwara I project could potentially produce over 80,000 tons of copper and 200,000 ounces of gold annually. Plus, in addition to PNG, Nautilus also has licenses in Fiji, the Solomon Islands, Tonga, and New Zealand. The Solwara I project is approximately the size of 15 football fields. The company has licenses to drill a total area the size of 680,144 football fields.
If Nautilus successfully mines copper and gold from the ocean floor, it will create a whole new industry – with no competitors. Frank says, "It will be like the Microsoft Windows of deepwater mining."
Phase 1 readers can access Frank's latest advice on Nautilus – including his buy-up-to price – in this January 18 update.
The Atlas 400 is preparing for its first adventure of 2011. And there might be a spot for you...
The Atlas 400 is a private social club Porter started last year. (It's a completely separate entity from Stansberry & Associates.) The purpose of the club is simple: To bring intelligent, successful, like-minded people together to exchange ideas... enjoy new experiences... and make new friends among equals. We travel the world several times a year to have experiences that are completely "off-limits" to the average person.
So far, we've gone billfishing at the best fishing lodge in the world, sat front row at the Super Bowl, been to Oktoberfest in Munich, and raced BMW and Porsches at their private tracks in Germany. The events are world class... and a lot of fun. But there's more to Atlas' trips than the activities...
Outside your own health and abilities, nothing is more important to success than the people you surround yourself with. And sharing incredible, once-in-a-lifetime experiences with some of the most successful people in the world builds deep friendships. Considering the current state of our nation, having these networks is more important than ever.
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But back to the fun stuff...
The first week of March, Atlas is heading to Swedish Lapland (the arctic) for another adventure. We'll view the Northern Lights, dogsled through the wilderness with a world champion guide, practice driving sports cars on icy terrain, ice fish, and sleep in custom-built igloos for a night. We're looking for a few folks to join us.
Now... joining us in Sweden is no guarantee you'll be admitted membership to Atlas, and the trip is expensive (around $15,000 for the week). But it's sure to be an incredible experience. And it will be a good opportunity for you to meet other members – all successful, wealthy entrepreneurs – in person.
Only a few spots are available. And you must let us know you're interested by next Monday. If you'd like to join us in Sweden, or just want to hear more details, please e-mail me, Sean Goldsmith, at sean@theatlas400.com. Also, if you'd like to learn more about The Atlas 400, click here...
Before I get to our End of America update and the mailbag, a little housekeeping...
We recently had a few cancellations for our retirement conference in Miami next month. We've asked the principals of a top-tier New York and Palm Beach, Florida-based estate-planning firm to discuss their proprietary estate-planning product. Their product, known as The Retirement Protection Plan, not only helps you avoid paying estate taxes on your retirement accounts, but can actually double the amount of money available to your heirs. To read the full details and enroll, click here.
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New highs: Continental Minerals (KMK.V), Sprott Resources (SCP.TO), Dun & Bradstreet (DNB), ExxonMobil (XOM), Procter & Gamble (PG).
In today's mailbag, we have another question we receive often. For the record, we never sell or rent your e-mail address to anyone. Send us more accusations here: feedback@stansberryresearch.com.
"I don't appreciate your sharing my email address with another financial information firm. I may cancel if this happens again." – Paid-up subscriber Ike Eichhorn
Goldsmith comment: Ike, we dislike spam as much as anyone. That's why we never sell or rent our subscribers' e-mail addresses to anyone. We never will. On occasion, we pass along information about an outside firm's products to our readers, but these firms will only have access to your e-mail address if you choose to become a reader of theirs.
Regards,
Sean Goldsmith
Baltimore, Maryland
January 24, 2011Underwater gold mining about to start... The Atlas 400 heads to the arctic... Barron's roundtable and the collapse of the dollar...