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NOBODY KNOWS ANYTHING

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NOBODY KNOWS ANYTHING

Kal Kotecha PhD

Any ordinary person using nothing more than common sense and what they already know or can easily obtain, can learn to make profitable decisions if only they learn to ignore the experts, the gurus and other fools.—Bob Moriarty

Bob Moriarity of www.321gold.com, an icon in the resource arena has written a fantastic, easy to read and practical book called Nobody Knows Anything that focuses on why it is more important for investors to understand human behavior than it is to know about a specific investment. With all bubbles, eventually the lemming investors will want to go over the cliff together because everyone will be doing it. Nobody Knows Anything will prepare you to see the opportunity when the herd is headed for the rocks.

This book resonated with me as I just completed my PhD thesis on the Affective Heuristics of the 2008 stock market crash which focuses on human psychology and investment behavior.

Teaching at the University, I see so called experts professing to know something I feel they really do not. Their stale knowledge was useful 30 years ago but being out of the field for so long, what motivation do they have to upgrade their skills as they collect their 6-figure salary and fat pension? Yet hundreds of students eat up every word thinking they are learning something useful. One cannot blame the teacher nor the student but the fact remains that common sense trumps theoretical knowledge from any expert.

Unfortunately, I learned the hard way that listening to experts doesn’t always translate to big profits. In fact it originally had the opposite effect. In 1987, at the tender age of 17, I was working two jobs while finishing up grade 12. I was also studying the stock market and thought I was going to be a millionaire by the time I was 19 if I listened to the “experts”. They were saying BUY BUY BUY – so I invested my hard earned money into the market in September of 1987 and then Black Monday hit wham! – the single one day largest crash in history. I was wiped out! I could have held and waited for the market to rebound but I sunk all my money into Bank of Montreal call options which were expiring in December of that year—yes, I really listened to the experts. Again during the tech rally, I bought when everyone else was buying and again lost – I wish Bob’s book had been written back then. In Chapter 2 he talks practically about contrarian investing and why it is important.

In 2002 one year before I started my gold newsletter, I decided to learn from my past mistakes and do exactly the opposite of what the so-called experts were saying as they echoed, “don’t buy gold.” I bought my first gold stock and silver coins during that year—it paid off!

As Bob explains: You would need to know the basics of investing because none of the experts or gurus wants you to think. They want your money and the only way to do that is to keep you ignorant. So they take your money and tell you what you want to hear. (A lack of) money is the root of evil. It’s a very successful business plan; politicians have been using it for centuries. If you tell people what they want to hear; they will vote for you. That’s just as true in investing as it is in the voting booth.

Bob answers these important investing questions in-depth: Should you invest on news? Does manipulation really matter? When should you sell? Why is contrarian investing important? What is the next big investment opportunity? The little investment in this book could save you alot of money and also could make you a lot more money.

Nobody Knows Anything is available on Amazon in Kindle format for $3.99 and in paperback format for $9.99

I’ve always enjoyed reading Bob’s books and articles. I appreciate the fact that he has a no holds bar approach to writing – he calls it like it is. He has a flare for writing by providing a story that is related to the material and then proceeds to give examples. Even a seasoned investor can get a lot of practical information from this 125-page power packed book.

Happy Investing!

Kal Kotecha PhD

Kal Kotecha, PhD, is the editor and founder of the Junior Gold Report, a publication about small cap mining stocks that is read and enjoyed by thousands of investors. He was the editor and creator of the Moly/Gold Report, which focused on critical analyses and open journalism of companies profiting from the precious and base metals sector. The scope of his current activities include worldwide onsite analyses and reporting of developing companies. Kal has previously held leadership positions with many junior mining companies. After completing his MBA in Finance in 2007, Kal completed his PhD in Business Administration in January 2016. His thesis was on the Affective Heuristics of the 2008 stock market crash. He also lectures Economics at the University of Waterloo and Niagara College where he was voted Professor of the Year 2013/2014.

Contact: kal@JuniorGoldReport.com

American Lithium Corp. – Operating In A Surge

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American Lithium Corp. – Operating In A Surge

 

Kal Kotecha PhD

Renewable energy is one of the most prominent growth sectors for personal investors to capitalize on. An increasing number of companies are focusing their strategic planning on developing revenue streams that utilize renewable energy sources in their products and services. Leading the charge in this area are companies in the technology and transportation fields, as their goods and services critically rely on efficient, highly accessible power sources for long-term sustainability considerations. Put simply, if vehicles and laptops don’t have an affordable power source they will no longer be marketable to the average consumer at a reasonable price.

One of the most important sources of renewable energy being developed to meet these future energy demands is lithium. “Lithium is a soft metal, the lightest in the periodic table, with a silvery white appearance that reacts immediately with water and air. Lithium also has the highest electrochemical potential of all metals. These properties provide very high energy and power densities for long useful life in small and comparatively lightweight packages that is driving growth in demand” (Fox-Davies Resource Specialist, 2013). Lithium has a variety of end-use applications including glass (largest market), air conditioning, medical, polymers, lubricating greases and metallurgy. The fastest growing and second-largest market for lithium globally is for use in batteries, including both rechargeable and non-rechargeable versions.

American Lithium Corporation (TSX-V: LI) (or “the Company”) is an exploration stage company located in British Columbia engaged in the acquisition, exploration and development of resource properties. With a market cap of just over $31 Million, the Company owns the rights to acquire the Fish Lake Valley Lithium Project and the Atlantis Lithium Project, both in Esmeralda County, Nevada, USA; and also owns 100% of the Reliance Gold Property in the Bridge River Gold Camp of British Columbia.

Exciting news was released today:

American Lithium Acquires 7,110 Acres over 2 Projects – Increases Nevada Lithium Brine Portfolio to over 20,000 Acres

  • Addition of 4,870 acre Colorado Project ‎to increase Fish Lake Valley lithium brine portfolio to 18,552 contiguous acres
  • Addition of 2,240 Acre San Emidio Project 100 km NE of Reno – home to Tesla’s Gigafactory, to increase total Nevada lithium brine portfolio to 20,790 acres
  • Company has assembled the largest contiguous land position in Fish Lake Valley, Esmeralda County, Nevada

May 24, 2016 – Vancouver, British Columbia – American Lithium Corp. (TSXV: Li) (“American Lithium” or the “Company”), is pleased to announce that it has entered into an agreement to acquire all of the outstanding share capital of 1067323 B.C. Ltd. (“1067323”), a privately held British Columbia based mineral exploration company.  At the closing of the acquisition, the Company’s total Nevada lithium brine portfolio will increase to 20,790 acres (8,413 hectares), including 18,552 contiguous acres (7,508 hectares) in Fish Lake Valley, Esmeralda County, and 2,240 acres (907 hectares) in Washoe County.

1067323 holds the rights to acquire a series of 193 placer and 44 lode claims, over 4,870 acres (1971 hectares) in Fish Lake Valley, Esmeralda County, Nevada (the “Colorado Property”).  Additionally, 1067323 holds the rights to acquire the San Emidio property (“San Emidio Property”), representing a series of twenty-eight (28) placer claims, over 2,240 acres (907 hectares) in Washoe County, Nevada.  The Company will issue 6,000,000 common shares to acquire all of the outstanding share capital of 1067323.

American Lithium CEO, Mike Kobler commented, “In acquiring the Colorado and San Emidio properties, we have increased our Nevada portfolio of highly prospective lithium brine projects to over 20,000 acres.  The acquisition of the Colorado property completes our Fish Lake Valley acquisition strategy at 18,550 contiguous acres and positions American Lithium as the dominant claim holder in this important lithium brine basin.  The acquisition of the San Emidio property located in north Nevada now moves us to the next stage of our strategy as we begin to diversify our asset base by identifying and acquiring the best lithium properties in the state.”  Mr. Kobler continued, “The San Emidio property was the focus of extensive exploration programs carried out over a four year period including a gravity geophysical survey completed in 2011, which indicates that an earlier discovered near surface lithium brine anomaly occurs on the west side of a basinal low.  The proximity to a feature of this nature and the presence of lithium in the brines are criteria that are necessary for the formation of a Silver Peak style lithium brine deposit.”

San Emidio Project

Project generator Lithium Corporation completed exploration programs on the San Emidio property from 2009 to 2012, including sediment and brine geochemical studies, gravity geophysics, and two phases of direct push drilling.  Anomalous lithium values were detected during the brine sampling program with assays ranging from trace to the highest lithium value of 81 mg/L.  The gravity survey defined a basinal depression proximal to the San Emidio lithium in brine anomaly, similar to that seen in the area of the producing brine field in Clayton Valley, which is a direct analog of the San Emidio prospect.  The direct push drilling confirmed the presence of lithium in the brines and outlined a lithium-in-brine anomaly approximately 1 km wide, and more than 5 km long, within which anomalous lithium enriched brines with concentrations ranging from trace up to 23.7 mg/L were encountered at depths ranging from 24 to 39 meters subsurface.  As is the case at Clayton Valley, lithium concentrations in brines at San Emidio may be reasonably be expected to increase at depth.

To acquire an eighty (80%) interest in the San Emidio Property, 1067323 is required to make payments of cash and common shares, and incur exploration expenditures, as follows:

  • An initial cash payment of US$100,000.
  • Incurring exploration expenditures of not less than US$600,000, consisting of US$100,000 on or before the first anniversary, an additional US$200,000 on or before the second anniversary, and an additional US$300,000 on or before the third anniversary.
  • Issuing 300,000 common shares of the Company, with 100,000 common shares issuable following the acquisition of 1067323, 100,000 common shares issuable on or before the first anniversary, and 100,000 common shares issuable on or before the second anniversary.

Once 1067323 has earned an eighty (80%) interest in the San Emidio Property, it can acquire the balance of the property, subject to a two-and-one-half (2.5%) percent net smelter returns royalty, through the payment of US$1,000,000.

Colorado Property

To acquire a one-hundred (100%) interest in the Colorado Property, subject to a one (1.0%) percent net smelter returns royalty, 1067323 is required make the following cash and common share payments:

  • An initial cash payment of C$200,000 (paid).
  • Issuing 400,000 common shares of the Company following the acquisition of 1067323.

All securities issued in connection with the acquisition of 1067323, the San Emidio Property and the Colorado Property, will be subject to a four-month-and-one-day statutory hold period.  Closing of the acquisition of 1067323 remains subject to a number of conditions, including approval of the TSX Venture Exchange, and such other conditions as are customary in transactions of this nature.

Michael Collins, P.Geo. is the Company’s designated Qualified Person within the meaning of National Instrument 43-101, and has reviewed and approved the technical information contained in this news release.

For further information, contact Michael Kobler at info@americanlithiumcorp.com

ABOUT American Lithium Corp.

American Lithium Corp. is actively engaged in the acquisition, exploration and development of lithium deposits within mining-friendly jurisdictions throughout the Americas.  American Lithium holds options to acquire Nevada lithium brine claims totaling 20,790 acres (8,413 hectares), including 18,552 acres (7,508 hectares) in Fish Lake Valley, Esmeralda County, and the 2,240 acre (907 hectare) San Emidio Project in Washoe County.  The Company’s Fish Lake Valley lithium brine properties are located approximately 38 kilometers from Albemarle’s Silver Peak, the largest lithium operation in the U.S., approximately 3.5 hours from the Tesla Gigafactory.  American Lithium is listed on the TSXV under the trading symbol “Li”.  For further information, please visit the Company’s website at www.americanlithiumcorp.com.

The Company is actively engaged in the acquisition, exploration and development of strategically located lithium projects in mining-friendly jurisdictions throughout the Americas. American Lithium has positioned itself to take advantage of the growing demand for lithium. The company is looking to prove up 2-5 MM tons and with 20+k acres now – it is by far the largest lithium player in the Clayton/Esmeralda County region. Investors can expect both short and long term stock price gains as a result of three key factors which include:

  1. Recent property acquisition and plans for development
  2. Projected demand for lithium
  3. Pricing structure of lithium

Property Acquisition and Development

This spring-2016 saw American Lithium Corp. acquire 10,000 acres of of land titled the Fish Lake Valley land package, which includes the North and South Bowl Playas, the land package is located in a large Nevada Desert basin that exhibits similar geological and geophysical characteristics to neighboring Clayton Valley structure. Specifically, the determined geologic and structural features of American Lithium’s Fish Lake Valley property are strongly analogous to the structure and geologic settings at Albermarle Corporation’s (NYSE: ALB) Silver Peak Lithium-Brine operation housed at Clayton Valley – the only commercially producing lithium project in North America. Albermarle’s share price is valued at $76.17 as of May 17th. The proximity to Albermarle’s operation bodes well for the Company because of the positive reputation that will be projected on its own property.

American Lithium’s most recent acquisition occurred on May 9th, when the Company announced that it had entered into an agreement to acquire all of the outstanding share capital of 1065604 BC Ltd., a private British Columbia mineral exploration company that held a right to acquire a series of 69 placer claims and 19 association placer claims, comprising a total of 2,882 acres, located in Esmeralda County, Nevada, and known as the Atlantis Property. This acquisition effectively enabled the Company to own the sum of the key structures of the South and North Bowl Playas, which contain the lithium brines, and where gravity data shows distinct gravity lows. Brine is by far the easiest and lowest cost type of lithium resource to process (compared to rocks and clays), generally easier to explore, has a small environmental footprint, is faster to put into production, and requires less capital. (Mining Market Watch Journal, 2016).

The property has proven to contain economically significant lithium, boron and potassium brine mineralization. Of importance is that there is near total absence of magnesium in the brines, which is excellent as high levels of magnesium are problematic (costs go up significantly) when it comes to a production scenario due to its similarity to lithium. (Market Equities Research Group, 2016).

am20161

Source – American Lithium Corp., 2016

The acquisition of the Atlantis Property saw American Lithium’s share price increase by $0.13 from $1.12 on May 6 (previous trading day) to $1.25 on May 9. This fact is what drives my projection that the Company has excellent near term potential for increases to its current share price of $1.05. American Lithium has outlined their exploration and development plan, which includes a follow through exploration and development program in the range of US$1 million – $1.5 million to focus on structures and sweet spots. The Company plans to build 5 to 6.5 kilometers of road deeper into the property and will conduct additional ground gravity surveys along with a sonic drill program to obtain geological samples from basin sediments in a cost effective way. The exploration and development plan is expected to be implanted in the summer of 2016, at which point investors can expect another surge in the Company’s share price. Those investors who capitalize now while the share is undervalued should not be surprised to see the stock’s price rise to the $2.00 region once the program is implemented and survey results are shared – similar to how the market reacted to the Company’s recent acquisition, but on a larger scale.

Growth in Lithium Demand

As noted in an article published in the January edition of The Economist, lithium is a vital component of batteries that power everything from cars to smartphones, laptops and power tools. With demand for such high-density energy storage set to surge as vehicles become greener and electricity becomes cleaner, Goldman Sachs, an investment bank, calls lithium “the new gasoline”. (The Economist, 2016).

Fox-Davies provides us with a projected demand forecast for lithium applications ranging between 2011 and 2015:

foxdavies

Source: Fox Davies, 2013

With such significant demand being expected in the medium and long term, governments and private entities will show a desire to have easy access to lithium from domestic sources to avoid potential supply change issues. Albermarle’s Silver Peak Lithium-Brine operation hosting the only commercially producing lithium project in North America will no long be sufficient. The trend, I project, is that major resource companies will seek out junior mining companies holding high inferred resource properties and will purchase them. American Lithium falls directly into this category and is working to develop its lithium property at a prime time for a potential buy out in the medium term, thus driving its stock price even higher.

am2016

Source: American Lithium Corp., 2016

Pricing Structure

Now, an interesting component of lithium and its value to investors is the fact that there is no commodity market for lithium products (like those for copper or silver), and prices are effectively set by negotiation between producers and customers based on the customer’s needs and price trends (Mining Market Watch Journal, 2016). For investors, this means that in order to take advantage of the rocket potential housed in lithium, they should invest in companies that develop or market lithium to end users.

Lithium is currently experiencing a price surge driven by two key players: China and Tesla.

Lithium prices in China have risen from about $7,000 a tonne to over $20,000 recently, according to research by consultants CRU, while industry website Asian Metal says lithium carbonate, the compound used in batteries, has jumped by 76 percent in the past 12 months (Reuters, 2016).

Tesla produced less than 50,000 cars in 2015, however that is about to change as it ramps up to produce a more mass-market Model 3, which already has nearly 400,000 pre-orders and according to Benchmark Mineral Intelligence when that number hit 325,000 pre-orders (within a week after launch) the firm calculated that number alone will increase demand for lithium hydroxide by 20-30%. (Mining Market Watch, 2016). Tesla’s production of the Model 3 will genuinely effect the total available supply of lithium in the next two years, and companies like American Lithium will become valuable as a North American source of lithium production. The surging demand and (likely) lagging supply will continue to drive the price of lithium upward in the coming years. Investors seeking to benefit from the forthcoming lithium price and demand surge would be wise to invest in equities such as American Lithium, whose stock will rise complementary to the rising price of lithium.

American Lithium Corporation – Summary

American Lithium (TSX-V: LI) is positioned in a market that is seeing clear, upward trending demand from both private and public entities. The Company has the potential to see its stock price increase markedly in the short-term if it continues to reach its acquisition, property development and fundraising goals. The Company is headed by its CEO Michael Kobler, P.Eng, along with a very experienced management team whose members successfully built a major oil sands company (Osum Oil Sands Corp.) from inception to over $2 billion in equity value. With this kind of experience, investors should feel confident in their ability to manage the high potential and positive lithium market by actualizing American Lithium’s potential by increasing its stock price to a point that is legitimately valuable for its early shareholders.

Happy Investing!

Kal Kotecha PhD

Works Cited

“American Lithium Corp. Executing Large-Scale Strategy With Goal of Becoming Largest Resource Holder in Nevada.” Mining Market Wath (2016). Web. 17 May 2016    <http://miningmarketwatch.net/li.htm>

“American Lithium Corp. (TSX-V: LI) Upside Share Price Revaluation in Order.” Market Equities Research. 16 May 2016. Web. 17 May 2016 < http://marketequitiesresearch.com/report-li-0516.htm>

“American Lithium Corp.” TMXmoney. N.p., n.d. Web. 17 May 2016. http://web.tmxmoney.com/quote.php?qm_symbol=LI

“An Increasingly Precious Metal.” The Economist. The Economist Newspaper, 16 Jan. 2016. Web. 17 May 2016. < http://www.economist.com/news/business/21688386-amid-surge-demand-rechargeable-batteries-companies-are-scrambling-supplies>

“Lithium – the commodity winner you can’t buy.” Russell, Clyde. Reuters. Thomson Reuters, 12 May 2016. Web 17 May 2016. < http://www.reuters.com/article/column-russell-lithium-idUSL3N189152>

“The Lithium Market.” Fox Davies – Resource Specialists (2013): 1-15. Web. 17 May 2016. <http://www.globalstrategicmetalsnl.com/_content/documents/405.pdf>

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Equitorial Exploration Corp. – Capturing an Audience

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Equitorial Exploration Corp. – Capturing an Audience

 

Kal Kotecha PhD

Individual investors receive one enduring piece of investment advice offered across nearly all forums and by all authors, to achieve success in the market: diversify your portfolio. A diversified portfolio reduces risk by enabling adjustment of investments based on market conditions, has been shown to produce higher returns in the long term, and allows individuals to pursue multiple financial goals simultaneously. This common sense approach to personal finance has been thoroughly tested and has historically been the best way to help ensure financial success with the ebb and flows of the market.

With this in mind, the question of why more companies in the junior mining sector don’t pursue a diversified portfolio with their holdings arises. Would it not be practical for companies, depending on their circumstance, to hold multiple investments and interests in various properties, commodities and even operationally advantage facilities or technologies?

Today we profile one such company that is achieving this type of diversified portfolio, and as a result is positioning itself for both near and long-term stock success.

Equitorial Exploration Corp. (TSX-V: EXX) (“Equitorial” or the “Company), currently trading at $.05/share, is a Vancouver Based company engaged in acquisition, exploration and development of mineral properties located in Canada, Columbia and Panama. The Company holds a variety of assets, including its El Havila gold property located in Columbia, and maintains partnerships or direct stakes in several companies. The latter of these two segments of its profit structure is what we are focused on. The diversity of Equitorial’s partnerships and external corporate interests positions the organization to achieve rounded success in a fluctuating market.

The Company has interests primarily in companies, stimulating excellent synergies that will be advanced to the benefit of Equitorial’s shareholders. These three companies include:

  • Cardiff Energy Corp.
  • MineWorx Technology
  • Mag One Products Inc.

Each of these companies operates in a different niche of the junior mining sector, offering Equitorial significant advantages in the market, as they can focus their financial and personnel resources on the area that is most lucrative at a given time based on market conditions.

Equitorial Exploration came out with some exciting news today!

Equitorial Exploration Corp. Completes $1,000,000 Investment in Mag One Products Inc. and Expands into Lithium Extraction Technology

_________________________________________________________

Vancouver, BC, Canada – May 24, 2016 – Equitorial Exploration Corp. (TSX Venture Exchange: EXX, Frankfurt: EE1) (the “Company”) wishes to announce that it has now earned the exclusive right to joint venture with Mag One on a 50/50 basis to fund the construction of Mag One’s first modular production facility for the extraction of Lithium and related products. This is in addition to the Company earning an exclusive right to enter into the first JV to fund, the construction of production facilities that will be used to produce magnesium metal and products.

As reported by Mag One on May 17, 2016, Mag One Operations has access to 30 million tonnes of magnesium tailings at a price of $1.00 (U.S.) per tonne. This crushed rock, which is sitting on the surface near Danville, Que., Canada, contains approximately 23 per cent magnesium and is sufficient for 70 years of production of magnesium at the target capacity of 100,000 tonnes annually.”

The Company has completed its financing of Mag One for $1,000,000 by purchasing 1,111,111 units of Mag One. The units consist of one common share at $0.90 accompanied by one share purchase warrant at $1.10 for one year.

Jack Bal, President of Equitorial Exploration Corp, states “We are very excited to expand into the Lithium extraction business with Mag One and their proprietary Lithium extraction technology.”

More will be discussed on Mag One in this article but the significant of the news cannot be underplayed. Equitorial has JV’d with a juggernaut both in the magnesium and lithium industry who’s technology is poised to change the landscape of the lithium industry.

Cardiff Energy Corp.

Cardiff Energy Corp. (TSX-V: CRS) is an emerging junior oil and gas company engaged in the acquisition, exploration, development and production of oil and gas properties in the U.S. In September 2015, Equitorial announced the signing of a Participation and Joint Venture Agreement with Cardiff to fund the completion of Cardiff’s Clayton #1H horizontal oil and gas well and to help expedite the development of its Runnels County oil and gas leases in Texas. The Company purchased a 15% working interest from Cardiff for USD$270,000 and was granted the opportunity to fund and purchase a 25% working interest on all future wells drilled on Cardiff’s leases in Runnels County. In October, this relationship was enhanced when the Company purchased an additional 15% working interest in Clayton #1H from Cardiff for USD$360,000 brining the Company’s total working interest in the well to 30%. Further, the Company was granted the option to fund future lease acquisitions was raised to a 40% stake on all lands acquired in the Runnels County region of Texas.

location-of-clayton

Source: Cardiff Energy Corp. – Location of Clayton #1H well

In December, ­­­­Equitorial announced that Cardiff had completed an initial flow test on the Clatyon #1H well, reporting an initial flow rate of 275 Barrels of Oil Per Day without any stimulation via acid treatment to the formation. Representatives from Cardiff indicated that they were very pleased with the initial flow results and that they exceeded their initial expectations of what would be produced from the property.

The implications of these results are significant for Equitorial because the Clayton #1H oil and gas well is slated to enter production within the coming weeks (Capital Manager, 2016). With West Texas Intermediate oil reaching into the $40 sales range, 275 Barrels of Oil Per Day may generate $11,000 in sales. With Equitorial’s 30% interest in the Clayton #1H well, this would translate into $2,000 of cash flow into the company on a daily basis, totaling $60,000/month or $720,000 annually before production costs (approx. $15/barrel). This is a conservative estimate when factoring in the potential increase in Barrels of Oil Per Day with active stimulation of the well (Capital Manager, 2016).

Equitorial’s 30% stake within the Clayton #1H oil and gas well represents an opportunity for the Company to generate consistent revenue through the production and sale of a currently vital resource to our economy. Further, the Company’s option to finance 40% of future lease acquisitions by Cardiff demonstrates strong long-term planning by Equitorial as they are setting themselves up for long-term asset gains.

Equitorial’s relationship with Cardiff offers stakeholders short and long-term advantages, as the Company’s stock will likely increase when oil is produced and sold and will also increase in coordination with Cardiff’s stock as it seeks out additional properties within the Runnels County region of Texas.

Iberian Minerals – MineWorx Technologies Inc.

In October 2015, Equitorial entered into a debt settlement and share distribution agreement with MineWorx Technologies Inc., an extraction company which the Company owns 45% of. The agreement stipulated that the Company was to receive 5,181,547 shares in the capital of MineWorx at a price of $0.1566 per share to settle outstanding debt MineWorx owed to the Company totaling $808,547. This agreement resulted in Equitorial having ownership if a total of 17,025,000 MineWorx shares.

MineWorx is a private Canadian corporation which owns proprietary, patent pending, environmentally friendly, heavy metal extraction equipment and technologies. The technology is based on a mobile classification and gravimetric processing unit with an integrated water filtration, clarification and recycling system which allows for the concentration and extraction of heavy metals from soil, gravel or crushed material with minimal environmental impact, discharge and water consumption.

MineWorx also holds a patent pending process for the utilization of portable gravimetric extraction technologies at mine locations around the world to provide operators with a portable, low-cost, mineral extraction alternative, which in some locations, would reduce the usual permitting timelines due to the system’s minimal environmental footprint, impact and discharge.

mineworx

Source: Iberian Minerals – MineWorx’s extraction technology

The long and short of it is that MineWorx is a highly innovative heavy metal extraction company that has developed patents on environmentally friendly and economically efficient processes that have the potential to greatly reduce costs and improve productivity in mining operations. Equitorial’s interest in MineWorx is highly beneficial for the Company’s stakeholders because of the synergy between the two organizations and because of the fact that as MineWorx continues to develop and grow within the industry, Equitorial’s share price will increase in compliment to the growth.

In November 2015, MineWorx entered into an amalgamation agreement with Iberian Minerals Limited (TSX-V: IML). Under the terms of the amalgamation agreement, MineWorx shareholders received approximately 2.53646 common shares of Iberian for every one MineWorx common share. Along with its ownership of MineWorx, Iberian Minerals boasts a business strategy that is designed to engage its Spanish contacts and technical team towards the accumulation of high interest assets throughout Spain.

This, of course, represents a positive change to Equitorial’s relationship with MineWorx for two key reasons. The first, and most apparent, is the increase in total shares that the Company gained in Iberian. Specifically, Equitorial’s 17,025,000 shares in MineWorx transitioned to 43,183,231 shares in Iberian (17,025,000 shares x 2.53646 = 43,183,231 shares). As such, when Iberian’s share price increases as a result of advancing the innovative and incredible technology patented by MineWorx, Equitorial’s stake in Iberian will improve. Secondly, Iberian Minerals possesses the assets required to support MineWorx’s development in the market, ensuring that the technology is sold and utilized effectively.

The synergy between Equitorial’s business strategy and the technology being advanced by MineWorx via Iberian represents a net benefit to Equitorial’s shareholders, offering clear medium-term benefits for Equitorial’s share price as Iberian continues to grow.

Mag One Products Inc.

The last of Equitorial’s partnerships that we will discuss today is perhaps the most exciting. Mag One Products Inc.’s (CSE: MDD) objective is to become a processing and refining company, using its proprietary manufacturing technology that will allow it to be the world’s lowest-cost producer of 99.9% pure magnesium (Mg) metal ingots and ultra-pure magnesium compounds.

Recently (March 2016) Equitorial announced that Mag One has granted the Company a first right to a 50/50 joint venture to fund equally the construction of the first magnesium and refining production for use by Mag one to produce magnesium metal and related products. Upon the successful completion of the first production and refining facility under the joint venture terms, Equitorial shall then have the first right to enter into a further 50/50 joint venture in regard to participate to funding of the construction of the second production and refining facility on the same terms as the first joint venture.

Mag One differentiates itself in the junior mining sector through its proprietary manufacturing technology. Specifically, Mag One states that it holds a target operating cost that is at least 25% lower than existing global Mg producers, and a Mg sale price ranging from $2,400 to $4,3000 USD/tonne. Mag One’s annual profitability for each 5,000 tonne/year facility it develops is projected to be in excess of $5,000,000. A 100,000 tonne/year facility is therefore expected to generate profits in excess of $100M each year.

With Equitorial’s 50% stake in a forthcoming production facility, the potential direct revenue generation for the Company is significant. Especially when considering the expected growth in the global market for magnesium.

magone-magnesium

Source: Mag One Inc. – Magnesium

The current market environment that surrounds magnesium production production and distribution is advantageous for Equitorial’s partnership for three key reasons:

  1. Demand for magnesium compounds has grown steadily at a compound annual growth rate (CAGR) of slightly under 6% with demand growing slightly faster than the production pace (Berry, 2015)
  2. Currently, China is the largest producer of magnesium globally being responsible for between 70%-80% of production (Berry, 2015) and the United States imports the majority of its magnesium from the country. Equitorial and Mag One can achieve success within the market and gain a niche by leveraging their location advantage, securing corporate and industrial consumers in North America that prefer to source magnesia from regions closer to their production facilities.
  3. It is reasonable to forecast that demand for magnesium will improve in the long-term, as the mineral can be used to produce lightweight steel, which is becoming preferable in various consumer products including automobiles in order to achieve better performance, fuel economy and to meet requirements posed by environmental legislation related to material usage. As noted by Berry, there is an ample opportunity for additional magnesium usage in automobiles as a substitute for heavier metals (Berry, 2015) with current estimates cited from a report by the United States Automotive Materials Partnership stating that “by 2020, 250 pounds of magnesium will replace 500 pounds of steel and 90 pounds of magnesium will replace 130 pounds of aluminum per vehicle, resulting in an overall 15% weight reduction” (Berry, 2015) compared to the 10-12 total pounds of magnesium used in a vehicle now.

The relationship between Mag One and Equitorial showcases the Company’s propensity for strategic portfolio planning and an ability to drive synergies between parallel operations. The clear upward trend in demand for magnesium produced in North America highlights the potential long-term gains that this relationship will deliver to Equitorial’s stock price.

Conclusion

Equitorial Exploration Corp. (TSX-V: EXX) has effectively diversified its portfolio of partnerships and relationships with external companies to the benefit of its shareholders. The Company has positioned itself to improve its stock price continuously as a result of the short, medium and long-term growth that it will achieve as its partners advance their position in the market. At a current share price of $0.05 (May 20, 2016) investors looking for an organization that has strategic interests across the junior mining sector, effectively managing its risk in the fluctuating market, should look to Equitorial as a high potential growth organization.
Happy Investing!

 

Works Cited

Berry, C. (2015). A Closer Look at Magnesium. The Disruptive Discoveries Journal, 1-15.

“Positioned For Game-Changing Success.” Captial-Manager. 11 Apr. 2016. Web. 15 Apr. 2016.

Iberian Minerals. Web. 16 Apr. 2016.

Mag One Products Inc. Web. 15 Apr. 2016.

Cardiff Energy Corp. Web. 15 Apr. 2016.

 

 

Disclaimer

© 2010 Junior Gold Report

Junior Gold Report’ Newsletter: Junior Gold Report’s Newsletter is published as a copyright publication of Junior Gold Report (JGR).  No Guarantee as to Content:  Although JGR attempts to research thoroughly and present information based on sources we believe to be reliable, there are no guarantees as to the accuracy or completeness of the information contained herein. Any statements expressed are subject to change without notice. JGR, its associates, authors, and affiliates are not responsible for errors or omissions. Consideration for Services: JGR, it’s editor, affiliates, associates, partners, family members, or contractors may have an interest or position in featured, written-up companies, as well as sponsored companies which compensate JGR. JGR has been paid by the company written up. Thus, multiple conflicts of interests exist. Therefore, information provided herewithin should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. No Offer to Sell Securities: JGR is not a registered investment advisor. JGR is intended for informational, educational and research purposes only. It is not to be considered as investment advice. Subscribers are encouraged to conduct their own research and due diligence, and consult with their own independent financial and tax advisors with respect to any investment opportunity. No statement or expression of any opinions contained in this report constitutes an offer to buy or sell the shares of the companies mentioned herein. Links: JGR may contain links to related websites for stock quotes, charts, etc. JGR is not responsible for the content of or the privacy practices of these sites. Release of Liability: By reading JGR, you agree to hold Junior Gold Report its associates, sponsors, affiliates, and partners harmless and to completely release them from any and all liabilities due to any and all losses, damages, or injuries (financial or otherwise) that may be incurred.

 

Forward Looking Statements
Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward looking statements are usually identified by our use of certain terminology, including “will”, “believes”, “may”, “expects”, “should”, “seeks”, “anticipates”, “has potential to”, or “intends’ or by discussions of strategy, forward looking numbers or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the effectiveness of the Company’s business model; future operations, products and services; the impact of regulatory initiatives on the Company’s operations; the size of and opportunities related to the market for the Company’s products; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance. Junior Gold Report does not take responsibility for accuracy of forward looking statements and advises the reader to perform own due diligence on forward looking numbers or statements

Is This the End of the Road?

Techwor8
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Is This the End of the Road?

In May of 2008, there was a very similar stock market ‘rally’ as compared to today’s ‘rally’.  Investors believed that the ‘turmoil’ during the latter part of 2007 and the early part of 2008 was permanently over and that we were headed towards a strong economic growth!

In actuality, it merely masked the ‘declining economic collapse’.  The same situation is happening, all over again, even as you are reading this article.  There are numerous flashing red lights, currently while the stock markets is ‘collapsing’ once again, just as it did during the beginning of the spring of 2008!

may201

There have now been four consecutive quarters in which corporate earnings have declined. The profits from the SPX were down over 7.1 percent during the first quarter of this year.

The U.S. markets have now entered the next phase – a stock market downturn. The global financial system is now starting to ‘unravel’ which will have far reaching implications!

In fact, the real truth of the matter, is now about to worsen, from this point of time and onwards!

While this country has 100 million American people, who are unemployed and searching for work, and yet are unable to find any, I say this is a major RED WARNING ALERT that must now need be heard loud and clearly!

According to the FED, forty-seven percent of all Americans are not able to come up with $400.00 in case of an actual emergency situation, that they may incur.  They would either need to sell personal belongings or borrow the money, somehow!

The majority of Americans are now living from paycheck to paycheck: (http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/).

 

In December of 2015, when the FED raised their interest rates, for the first time, in almost a decade, they had projected a one percent ‘hike’ in 2016. I was apprehensive of their prediction and had forecasted that the FED would not “materially” hike rates!

The FED later backtracked their estimates to half of a percentage point ‘hike’, in 2016 during their March meeting.

The chances of a June 2016 ‘hike’ are low to nil as the “Brexit” referendum is being held only one week after that FED meeting. If the U.K. votes for a “Brexit” from the European Union, then the financial implications may wreak havoc on the already fragile global economies. Hence, the FED will not chance raising it especially before such a significant and important event.

Similarly, post July 2016, the U.S. Presidential race will ‘heat up’ and the FED will not want to raise interest rates prior to knowing what the next Presidents’ ‘economic policy’ will be. However, if the world economy falters, the FED will have to follow the other Central Banks and ‘restart’ QE.

The timing of a stock market ‘crash’ is presently within our reach. All signs are pointing towards a higher price for gold; both in the near-term and the long-term.  Enforced negative interest rates which are more of the FEDs’ Quantitative Easing (QE) and the race to devalue the U.S. dollar. This proves to be quite bullish for gold. The timing of all of these concurrent events are affecting the gold market!

The rise of the stock market is widely viewed today as the result of ‘Quantitative Easing’(QE).  A bandage was placed on that financial crisis which was never structurally repaired. Today, I believe that investors have long since given up on the FEDs’ bond buying as a means of repairing the economy.  There is so much skepticism, at this point, as to what direction the equity-market is trending – Up or Down?

SP500 Weekly Chart

may202

The response from the FED was to ‘debase’ the U.S. dollar as reflected in its’ decline of 4.7% thus far in 2016.  Treasury bond yields have dropped well below 2%.  Something has truly gone horribly wrong within the economy!  However, the FED is trying to put up a brave front.  They have asserted that they are considering a ‘hike’ in their June 2016 meeting, but this is very misleading as there will be no “material” short-term interest rate hike in my opinion.

Monthly US Dollar Index:

May203

Weekly SP500 Stock Index

May204

Daily Gold Chart

May2015

These problems that exist within all of these markets are that of the global Central Banks, which are sending their mixed messages. They are actually driving the dollar higher for the time being.

Two weeks ago, the Bank of Japan did not provide more monetary accommodation, as was expected, at that time; whereas last week, BOJ announced they would do so. Therefore, the dollar rose up whereas other currencies, including the Euro and the Yen, fell rather hard.  This reaction resulted in both metals and stocks going down.

The three Central Banks have now reversed their prior announcements regarding monetary policy, within the last month. First, the ECB and then the FED and now the BOJ.

The FED is currently working on a different scenario in which they are stress testing negative Treasury bills. This scenario, in which the interest rate on the three-month U.S. Treasury bill becomes negative, in the second quarter of 2016 and then declines to -0.5% remaining at that level until the first quarter of 2019.

The Fed stated, “The severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.”   (http://www.bloomberg.com/news/articles/2016-02-02/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016 ).

Gold prices are surging this year and that has ‘the smart money’ flocking towards the yellow metal.

During this global contraction, it is only a matter of a very short period of time before the stock market reflects this reality.

Truly, this is the beginning of ‘The Great Reset’!

 

CONCLUSION:

In short, big things have slowly been unfolding that will be not only life changing but will change the entire financial situation of the world.

The good news is that there are many ways to profit and prosper from these events. A few simple and well time positions can yield huge results for the savvy trader and investor.

Follow my lead as we place special ETF trades to prosper during the pending market collapse:www.TheGoldAndOilGuy.com

Chris Vermeulen

link to article: http://www.thegoldandoilguy.com/is-this-the-end-of-the-road/

A Walk Through a Cemetery in France

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Bob Moriarty
Archives
May 14, 2016

After hearing the comments from Russian President Vladimir Putin to the UN in September of 2015 I realized it was time for me to try to write the book others have been telling me I needed to write since 1970, about my experiences in war.

Putin’s speech said things no American politician would dare discuss. He talked about America’s disastrous policies in the Middle East.

“But how did it actually turn out? Rather than bringing about reforms, an aggressive foreign interference has resulted in a brazen destruction of national institutions and the lifestyle itself. Instead of the triumph of democracy and progress, we got violence, poverty and social disaster. Nobody cares a bit about human right, including the right to life. I cannot help asking those who have caused the situation; do you realize what you’ve done? But I am afraid no one is going to answer that. Indeed, policies based on self-conceit and belief in one’s exceptionality and impunity have never been abandoned.”

I did the book in three weeks. After all, I have been writing it in my head for 47 years. All I accomplished in three weeks was to finish typing it. I surprised myself; it was better than I thought it would be.

Then I tried to figure out how to get it into print. The natural publisher seemed to be the Naval Institute Press. After all I was the youngest Naval Aviator in the Vietnam era and flew some 832 missions in combat. I sent them the first twenty pages and a cover letter detailing my background at the first of November. I figured it would take them a week or so to get back to me and by then I’d be about finished. I completed the book and I’m still waiting to hear from them. Time passes at the speed of molasses in winter in the publishing business it seems.

A 321gold reader, who is also an editor, emailed me from Japan, and we polished the book and I figured I should self-publish, at least on iTunes and Kindle format. While I’ve been an Apple aficionado since Christ was a corporal, I found working with Apple to be far more work than it was worth. On the other hand, working with Amazon to put a book into Kindle format was about as hard as falling off a bike. Once the Kindle version was up, I thought I would give CreateSpace a shot at making a paperback version.

Much to my astonishment, Amazon can print one paperback book at a time through CreateSpace. There is no minimum order for books to be printed. That’s handy. If you go to one of the many self-publishing houses and have to place an order for 1000-3000 books in order to get the price down for a hardback, you will find yourself waltzing around stacked boxes of books to get to your bed.

You can have the greatest book in the world and post it on Kindle and CreateSpace but before you do you need a cover. For the first printing of my book we used a picture of an F-4B with some napalm canisters in front of it. I put the book up, got some sales and a few people didn’t like the cover.

Today you can make a major change to a book or its cover in a day. It took me longer. I went to a site that offers custom designs from hundreds of artists from all over the world. I wanted something that showed not only the tools of war but the cost as well. It was handy but the entire process took about two weeks to get and judge the potential cover.

The design I chose showed an F-4 dropping bombs over a jungle at the top and a military cemetery at the bottom. Neither the government nor the actual military ever want to show their citizens what the real costs of war are not only in gold but also in blood. So you never see a heroic war film set in a cemetery when they all should be. I was quite happy with the 2nd cover. The $399 I paid for the design was well spent.

In November I needed some peace and quiet to type the book so I called in a marker from a friend who had offered the use of his retreat in The Alps. I stayed in the snowy mountains for almost a month working. Somehow I managed to capture not only the end of fall but also the beginning of winter. It was pretty nice.

In early March I took a vehicle from England to my mountain hideaway. The trip was about 600 miles and even with the great roads in Europe it was too far for a one-day drive. So in advance I made up my mind to stop for the night near Reims east of Paris. I went to booking.com and fed in my location and asked for a nearby B&B. It found one, highly rated, near my location at a good price. I was driving down this tiny country road west of Reims when I came across a giant military cemetery.

Since I had only finished the 2nd cover of the book a week or so before and knew how easy it was to change the design, I stopped and took a lot of pictures. Then I walked through the well-tended cemetery. As I strolled I read each of the grave markers. The graves were of young men from 17 into their 30s. They all died in early September of 1914 at the start of WWI.

3rd cover

Most people will still remember what ignited WWI but they probably have forgotten or never knew the nuances of how the war actually began. Obviously there was the assassination of Archduke Ferdinand and his pregnant wife on June 28 of 1914. Austria-Hungary intended to use the incident as an excuse to attack Serbia. Russia supported the Serbs so they mobilized, then Germany mobilized, so France mobilized to support their ally by treaty, Russia. England made it clear that they would back France in case of war and they mobilized as well.

Germany believed they could end the pending war with a swift victory over the French and British troops in France. They invaded Belgium and bypassed the French forts guarding the border with Germany. All of a sudden the entire world was at war without anyone in particular to blame when in fact everyone in general was responsible.

If the stupidity of yesterday sounds a lot like the stupidity of today, perhaps there is a reason. Nato just launched a “missile defense shield” in Romania ostensibly to protect Europe from Iranian missiles fired at it. Unless Nato knows something utterly unknown to the rest of the world, Iran has no conflict of any sort with Europe. Not content with just infuriating Russia, the US seems determined to create as many powerful enemies as possible in the South China Sea where they continue to ignore Chinese warnings to avoid what China considers their territorial waters.

In 1648 to end the Thirty Years’ War, the countries of Europe agreed to a new concept of sovereign nations in an agreement called the Treaty of Westphalia. That is, every nation had a right to self-defense and secure borders without outside interference. Later international doctrine such as the Nuremberg Trials determined that wars of aggression were the “supreme international crime.”

Under the Bush Doctrine the concept of independent and secure states was turned on its head with the US claiming a new right of preemptive warfare against anyone who might ever be an enemy of America. Should Russia and/or China claim a similar right of preemptive self-defense, they could feel justified on a first strike against the US and be at least as legally justified as the US attacks on Iraq, Iran, Afghanistan, Pakistan, Somalia, Sudan, and Libya.

It’s hard to imagine the carnage involved in a World War. My walk through two French cemeteries from the opening days of WWI brought that home to me. The crosses lined up as far as the eye could see. As you walk down a row and inspect what are but forgotten names now, a hundred years later, you cannot help but wonder what life would have been like for those young French soldiers with the ribbon of their lives clipped all too early.

The Germans closed within 30 km of Paris. If only they could capture the city, the war would end. But a stupid German general, and are there really any other sort, disobeyed his orders and turned to the southeast to chase down a faltering French army on the verge of collapse. His actions opened a 30-mile gap in the German lines. The French were quick to take advantage. Meanwhile the British general in charge of the British forces needed a swift kick up the backside to rush his men into battle.

In what was called the Miracle of the Marne, the French put together a fleet of six hundred taxis to rush fresh soldiers to the battle. It was little more than a symbolic gesture but isn’t war little more than a collection of symbolic gestures? The tide turned, the Germans retreated and began digging trenches for a new style of warfare unknown in history.

The battle was significant for a number of reasons. It ended the concept of cavalry charges across open ground since machine guns could slaughter hundreds of men in minutes. It began trench warfare that lasted another four years. In the first half of September 1914, the French lost over 100,000 soldiers. They [the French] lost 1.3 million during the entire four years of the war and lost 7.5% of that total in a two-week period.

One of the cemeteries I walked through was filled with some of those men. It was moving. War costs not only money but also blood. WWI bankrupted the UK, destroyed the Russian Empire and caused the Russian Revolution, ended the Ottoman Empire and the Austria-Hungary Empire. No one really won. No one wins any war. But everyone loses. All that matters is just how much damage you have done to your own country by participating in a stupid war.

Many scholars of war agree that the harsh terms of the Treaty of Versailles signed in 1919 directly led to the rise of Hitler and WWII. So a war begun over something as simple as an assassination of a minor royal figure ultimately led to the deaths of 17 million in WWI and 60 million in WWII.

I called my book The Art of Peace. It can be ordered from Amazon in either Kindle format or paperback for either $14.99 or $19.99.

It’s the story of a young man going to war and his feelings about war in the hindsight of fifty years of history. It’s a pretty good book. I’m proud of it. You don’t need to read the book to understand just how I feel about stupid wars. Just go spend a day walking through a military cemetery and you will know exactly my feelings.

Article source: http://www.321gold.com/editorials/moriarty/moriarty051416.html

Hiding the Elephant: Fort Knox’s Vanishing Act

Techwor8
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Hiding the Elephant: Fort Knox’s Vanishing Act

Kal Kotecha PhD

In one of Harry Houdini’s finest moments as a magician, he made a 6,000-pound, Asian elephant disappear – into thin air. Billed as the “world’s most incredible conjuring illusion”, Houdini swept onto the stage at the New York Hippodrome in 1918 and proclaimed “allow me to introduce Jennie, the world’s only vanishing elephant.”

The elephant was then escorted into a large colored cabinet. The doors were closed. The stage was set and the drum roll began. Moments later, with a flourish, Houdini flung open the doors of the box. Six thousand pounds of elephantine flesh had vanished into thin air. The crowd went wild.

In the years that followed, Houdini presented that trick to wide-eyed audiences of a million and more. Magic historian, Jim Steinmeyer, exactingly chronicled this – and other – conjuring tricks in “Hiding the Elephant”, an exposé of stage illusions.

In 1933, with America five-years deep into The Depression, the stage was set for a magic act of unprecedented proportions. History shows a wicked warlock at work.

On March 6, 1933, Executive Order (EO) 6073 was passed by Franklin Delano Roosevelt (FDR), the 32nd President of the United States in an attempt to solve the dire banking crisis. Executive orders have been around since 1789, allowing Presidents to issue legally binding orders unilaterally, without the consent of Congress. During his Presidential tenure, from 1933 to 1945, Roosevelt would issue 3,728 Executive Orders. This was his third and it was a doozy.

Just two days after Roosevelt was inaugurated as President, he proclaimed a “banking holiday”. From and including Monday, March 6, 1933 to Thursday, March 9, 1933 no bank “would pay out, export, earmark, or permit the withdrawal or transfer in any manner or by any device whatsoever of any gold or silver coin or bullion or take any other action which might facilitate the hoarding thereof…” Sold to the American people as an attempt to control speculation and regulate interest rates, he closed America’s banks, thwarting customers from withdrawing their paper money holdings or converting their holdings to gold.

With a swish of his magic wand, Roosevelt mastered “complete control over America’s banking system”, expanding his Presidential powers exponentially in the process.

In his first “Fireside Speech” (which burned the backside of many Americans) on March 12, 1933 Roosevelt declared “Let me make it clear to you that the banks will take care of all needs, except, of course, the hysterical demands of hoarders, and it is my belief that hoarding during the past week has become an exceedingly unfashionable pastime in every part of our nation. It needs no prophet to tell you that when the people find that they can get their money — that they can get it when they want it for all legitimate purposes — the phantom of fear will soon be laid. People will again be glad to have their money where it will be safely taken care of and where they can use it conveniently at any time. I can assure you, my friends, that it is safer to keep your money in a reopened bank than it is to keep it under the mattress.”

On June 16, 1933, EO 6073 passed into legislation as the “Emergency Banking Act (EBA)”. After only 40 minutes’ debate in the House of Representatives, with an unknown author and no printed copies available for members of the House, the Bill was passed swiftly and without due process. The wand was waved again.

At the time, Congressman Lundeen, appalled at the reckless lack of due process involved in the passing of this Bill said “I want to put myself on record against procedure of this kind and against the use of such methods in passing legislation affecting millions of lives and billions of dollars. It seems to me that under this bill thousands of small banks will be crushed and wiped out of existence, and that money and credit control will be still further concentrated in the hands of those who now hold the power…. I am suspicious of this railroading of bills through our House of Representatives, and I refuse to vote for a measure unseen and unknown.”

Meanwhile, Executive Order 6073 paved the way for Executive Order 6102 on April 5, 1933.

This Executive Order (EO) made it a criminal act to possess gold coins, gold bullion and gold certificates within the continental United States and ordered that the hoarded gold be delivered to the Government on or before May 1, 1933. The official price of gold was raised from $20.67 to $35/ounce.

Although it is unknown just how much gold was confiscated by means of Executive Order 6102, numbers suggest that by January 1934, there were 195.1 million ounces and 227.9 million ounces by August 1934.

The Government had to have some place to hoard the confiscated gold. So, Executive Order 6102 paved the way to Fort Knox. The U.S. Treasury Department began construction of the United States Bullion Depository (USBD) in 1936. Completed in December of that year, at a cost of US$560,000, the Gold Vault sits in a 109,000-acre Army enclave in Fort Knox, Kentucky.

The U.S. Mint states that 147.3 million ounces of gold are now tucked into Fort Knox. Guarded by Apache helicopter gunships and tucked into a bunker with a bomb-proof roof and thick granite walls, you’d think that 147.3 million ounces of gold would be safe in the vault. While Treasury officials insist that the “gold is all there”, why the resistance to a public audit? Congress begs off, saying it will cost US$60 million to test the gold. Other figures bandied about suggest US$15 million. Other so-called experts contest both figures, stating that an independent audit and assay could be conducted for as little as US$15,000.

More nefarious are that the numbers don’t add up…and never have. In his article The Great American Disaster: How Much Gold Remains In Fort Knox?, dated August 27, 2010, Chris Weber states that, at their peak in 1949, the Fort Knox reserves reputedly numbered 701 million ounces – 69.9% of all the gold on the planet. The latest figures reported by the U.S. Mint state that 147.3 million ounces of gold are now tucked into Fort Knox. Treasury subsequently downgraded this figure from 264 million ounces of gold, a decline of 79%! Lucy, you got some ‘splainin’ to do.

Clearly, the road to – and from – Fort Knox is paved in gold and not-so-gold intentions. Tales of pillaging, profiteering and skullduggery abound at the crossroads of Bullion Boulevard and Gold Vault Road. Masked interlopers didn’t rob the USDB. Reputed to be the second most secure place in the world (as reported in The Blogington’s post of September 21, 2010), the video cams, armed guards, attack helicopters, armored personnel carriers, and 30,000 soldiers guarding Fort Knox guaranteed that.

For over 50 years, while domestically it was a crime to hold gold, there is little doubt that well-heeled Americans – and America’s enemies, operating offshore, were able to procure gold at the bargain basement price of $35/ounce.

Not surprising that Fort Knox’s 22-ton door is locked to an audit. For almost 40 years, no visitors have been allowed in the grounds of the Gold Depository. Considered one of the eight most secure places in the world, we’re not getting in for a sneak peek anytime soon. In the last recorded “audit”, in the early 50’s, a group of Congressmen and Senators were taken on a quick tour of Fort Knox and allowed to peek into a few vaults. They reported seeing “orange-hued gold bars”. Lucy, you got more ‘splainin’ to do.

In his article “The Great American Disaster: How Much Gold Remains In Fort Knox?”, Chris Weber outlines details about the one “audit” of Fort Knox, as follows:

“The only audit that has ever been done of the gold inside Ft Knox was done days after Dwight Eisenhower became President in January of 1953. After 20 years of Democratic presidents, the American public wanted to be sure that the gold confiscated from them was still there. Thus, the new President ordered an audit within hours after taking office.
The central problem was that it wasn’t much of an audit. To sum it up:
1. Representatives of the audited group were allowed to make the rules governing the audit. No outside private experts were allowed.
2. Those government bureaucrats involved were inexperienced in their tasks, by their own admission.
3. The entire audit of the largest gold hoard ever concentrated in history lasted only seven days.
4. Only a fraction of the gold was actually tested. Later, the officials put this fraction at just 5%.
5. Based on that fraction, the official committee reported that, in their opinion, all the holdings would have matched their records if they’d all been tested.
6. If the audit was accurate, the fact remains that almost 80% of it went overseas in the coming years. If the audit was not accurate, the amount of gold lost could have been even more.“

On September 23, 1974, Mary Brooks, the Director of the United States Mint, led a tour of members of Congress and the news media through the USBD. There was no audit or inventory of the gold and no other public “inspection” has been allowed since then.

Why won’t the Mint comment about how much gold is there? Perhaps the acid test is not so much as what has happened to the gold in Fort Knox; but rather is there gold in Fort Knox? And if so, how much…..or how little?

In a feat worthy of The Great Houdini himself, the Fort Knox gold may be the World’s Greatest Vanishing Act ever.

Source: Wikipedia-executive order 6102

Kal Kotecha PhD
Happy investing!

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