I've been waiting 10 years to write this story. While we don't normally discuss individual investment opportunities in The Digest, I think you'll agree the information I have to share with you today warrants an exception. It's a story – I'm proud to say – you will not find in any other investment newsletter, on any web page, in any magazine, or in any newspaper. This is a story I helped – in a small way – to finance. And I believe you'll agree, it's the greatest discovery in the history of geology. If I were to simply tell you the facts, up front, it would be completely unbelievable.
In short, there's a new, vastly more efficient way to find gold. But before we get to gold, you have to know the recent history of diamonds. And you have to know Chuck Fipke...
Any geologist can tell you that a particular kind of garnet – known as G10 – is highly correlated with diamond "pipes" – rich mines, full of diamonds. Unfortunately, G10 garnets are also found on the ground in lots of places where there aren't any diamond pipes below the ground. But it wasn't until about 15 years ago that a geologist named Chuck "Stumpy" Fipke made a crucial discovery. If you looked closely enough, you could actually tell – just by looking at the rocks – whether or not a particular group of G10s had been formed alongside diamonds.
So instead of having to dig mine shafts to discover the presence of diamonds, Chuck Fipke could literally scan for them from the surface. He also found more efficient ways to look for G10s, using magnetic waves (magnetometer surveys) from airplanes. In the mid-1990s, he mapped out most of northern Canada from the air. Then, he followed up with the most promising dozen locations...
Fipke's discovery process culminated in with one of the largest diamond mine discoveries of all time – the Ekati Diamond Mine, Canada's first. It's located 186 miles northeast of Yellowknife in the vast tundra of Canada's Northwest Territory. Within the boundaries of the Ekati block there are 156 known kimberlite pipes with diamonds. Since mining commenced in 1998, more than 40 million carats of diamonds have been produced. That's more than 17,000 pounds of diamonds.
Chuck Fipke isn't widely known outside of the mining community. But he has become one of the wealthiest men in the world. He also learned a few critical lessons from his diamond discovery. The most important lesson: Don't tell anyone what you've discovered. When the word leaked out about Fipke's G10 discovery, there was a huge land rush at Ekati – the largest "staking" rush in history. In order to get the financing and the land he needed to build his mine, Fipke had to sell a 90% interest in the property, 80% of which went to mining giant BHP. The next time would be different...
In 1999, Fipke was among a group of Canadian geologists visiting a new gold project in Mali, West Africa. After working for nearly 20 years on diamonds, Fipke was interested in applying the same techniques – carefully studying complementary minerals – around gold mines. As with G10 garnets, geologists had long known various types of monzonites are normally found around gold mines. Of course, monzonites are found in lots of places. No one had ever figured out a way to link particular monzonites with large gold deposits. No one, that is, until Chuck Fipke stumbled upon the Samira Hill project in Mali. He took samples of monzonites from around the mine and found a very, very unusual mineral – a single-ion monzonite (SIM).
Over the next two years, Fipke studied monzonite samples from the world's largest gold mines: Grasberg in Papua New Guinea, Olympic Dam in Australia, Oyu Tolgoi in Mongolia, and Pueblo Viejo in the Dominican Republic. He found the same unusual form of monzonite at the surface of all of these mines. And he didn't find it anywhere else.
Monzonite is a mixed bag of quartz and many different metal ions, like iron, nickel, lead, copper, etc. The key to Fipke's breakthrough was isolating monzonite with only one type of metal ion – usually copper or molybdenum. This indicator metal – SIM – has been discovered at every major gold discovery in the world. More importantly, it's not present anywhere else. Using this information, Fipke and his team have spent the last eight years secretly studying the world's possible gold deposits and buying up huge swaths of mineral rights, using more than 200 front companies.
Although I didn't know any of the details until just last week – no one did – I was involved in the private rounds of financing for these front companies simply because of my friendships with several of the major players in resource finance. As a result, the consortium invited me to its meeting last week in Las Vegas and offered to allow me to break the story in my newsletter. There will, of course, be a lot more media about this story over the next few weeks. But I got the scoop first. And now you'll know something 99% of the world's leading geologists don't...
What we now know – and what has never been reported anywhere else – is the world's largest gold deposits sit along the Pacific coast of South America along the Western face of the Andes mountain range. None of these discoveries has yet been made public. But using a front company, Fipke has already discovered, tested, proved, and sold a huge mine – also along the Pacific Rim – in Russia's Kamchatka Peninsula that today boasts 3 million ounces of proven gold reserves. This mine was sold to help finance the purchase of additional mineral rights in Colombia, Peru, and Chile. Based on the diameter of the SIM haloes, the projects Fipke is planning to commercialize (the top 20 discoveries he has made so far) range in size from 5 million to potentially more than 200 million ounces of gold.
The largest project, located in northern Chile, is uniquely rich, in terms of the quality of the ore. Surface samples contained more than 10 ounces of gold per ton. And in some places, gold is clearly visible in streams running through the area.
With all of the mineral rights secured, Fipke is preparing to publish his findings in the leading scientific journal of geology, Economic Geology. But he isn't going to reveal his process for isolating single ion monzonites. Far more importantly for my subscribers, he is also planning to merge the 200 or so of his front companies into a new holding company, Superior Universal Consolidated Resources (SUCR). This new firm is currently trading on the Toronto Stock Exchange. It has a market capitalization of $1 billion, almost all in cash, which will finance the acquisition of the 200 other front companies.
After the news of this discovery is made public and after the consolidation of all of Kipke's interests has been finalized, I expect SUCR to be the most valuable mineral resource company in the world – by a wide margin. Not only will SUCR own the world's 20 largest gold mines, it will kno
w where all of the other large deposits are located.
Plus, thanks to the enormous amount of copper that's also in these locations, SUCR will be able to mine the gold as a byproduct – which means the copper will finance all of the costs associated with these projects. In five years, SUCR will be able to set the world's gold price, much like OPEC controls oil prices.
Just remember who told you about this first...
Good investing,
Porter Stansberry
Baltimore, Maryland
April 1, 2009
P.S. Happy April Fool's Day