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Rare Earth is Buzzing

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Written by Nick Hodge
Posted March 9, 2012

I have trouble telling people what I do.

It's not that I'm ashamed of what I do or have something to hide... far from it.

Instead, I have trouble articulating it. And even when I do, people have trouble understanding it.

“So you're a financial reporter?” they ask.

Not quite.

“A financial advisor?”

Sort of, but I don't touch anyone's money. In fact, I'm kind of both and neither rolled into one...

I'm a financial reporter in the sense that I sniff out interesting financial stories and investment ideas.

But I'm not beholden to a corporate owner or advertisers, so I don't have to wait until the stories are “mainstream” enough; I don't have to worry about a certain number of clicks or views to keep ad rates up; and I certainly don't have to take sides on divisive issues.

I'm a financial advisor in the sense that I recommend what I think to be winning investments.

But again, I have no corporate owner, so I don't have to recommend a certain group of funds or charge high maintenance fees.

My parents just tell people I write about stocks. That's fine with me.

But the best way to understand what I and my fellow editors do is with a story...

It Was Late Summer Last Year...

When I started hearing rumors about a new kind of massive mine in Canada, situated close to the oil sands in Alberta.

But it wasn't an oil sands surface mine like the ones that have now made Alberta famous...

It was a metal mine. One that contained a full suite of eight metals (including lithium, vanadium, and uranium) — plus heavy and light rare earths.

Since the deposit was in soft shale and right on the surface, the metals weren't present in their typical solid form, but rather as tiny chemical compounds that could be extracted from the soil and reconstituted.

Billions of pounds of the metals are in this soft soil right on the surface...

And no one was talking about it.Alberta Shale Metal

So I contacted the company's president and organized a trip to see it for myself.

I booked a flight and chartered a private helicopter to take me to the mine. You can see me here checking out some surface samples.

After my trip, I compiled all my footage, pictures, notes, and data...

And I started crunching.

When I was finished, I deduced the mining parcel I visited contained over 610 million pounds of metal, including molybdenum, nickel, copper, and more.

I calculated these metals to be worth over $5 billion at current market prices.

Yet the market was valuing the company that owned it at less than $10 million, several hundred times less than it's worth.

It was one of the biggest pricing mismatches — and most interesting stories — I had ever come across.

I wrote a full report and told my readers to start buying the stock immediately. It was trading for $0.15.

Now Here We Are in March

It's been seven months since I toured the mine.

What's happened?

Well for starters, the stock has more than tripled. It's up 360% since I recommended it.

But more interestingly, I'm finally starting to see “major” news outlets catch on to the story.

Reuters ran an article about the mine this week, saying the company that owns it “could one day revolutionize base metal mining by allowing ore to be pulled out of shale deposits that were once impossible to tap.”

It also said the mine is “big enough to produce metals for decades, and processing is cheaper than the traditional smelting method.”

No kidding. It's a fascinating story and lucrative investment idea.

And it was both those things when I visited the property more than half a year ago.

The only reason Reuters caught wind of it was because the company happened to be presenting at a widely-attended conference.

So I'm a bit more intrepid than your standard beat reporter...

And no registered financial advisor would ever recommend you buy a $0.15 stock with a market cap under $10 million. That's why they never get 360%+ winners.

This stock has already tripled.

But remember — the metals in its shale are still worth several hundred times the current share price. So there is more room to go.

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Nick Hodge

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Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick’s Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.

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