| | Sat Feb 26, 2000
Excerpt from KBFR Jan-Feb 1999
Publisher: Kaiser Research Online
Author: Copyright 2000 John A Kaiser
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| | Excerpt from KBFR Jan-Feb 1999
Altoro Gold Corp (ATG-V): Kaiser $50,000 Bottom-Fish Portfolio
With Altoro I paid more than double the bottom-fish buy limit of $0.29, and for this violation the market has rapped my knuckles a bit with a pullback to the $0.45 level on light volume. I can, however, justify chasing Altoro. During December the stock had dipped below $0.30 to a level where it had been in equilibrium before Doug Casey tipped it in the fall and pushed it briefly to $0.40. When I picked Altoro as a bottom-fish the company had a collection of projects in Latin America with only vaguely interesting potential. Market mover Ross Beaty was a large but passive shareholder whose priority was Pan American Silver. In late December, however, Bruce Winfield stepped aside to let Beaty take the helm. That perked the stock above the $0.29 buy limit. Several weeks later Altoro signalled a major strategic shift by announcing the option of the Birch Lake platinum-palladium project in north-western Minnesota. Drilling during the eighties had revealed a deep subeconomic copper-nickel deposit at Birch Lake, but what has attracted Altoro is a platinum-palladium zone with grades similar to what is being mined in South Africa. The sweetener today is palladium, which during the past two years has broken out from its US $100-$150/tonne range to trade almost on a par with its cousin platinum. This development has sparked a revival of interest in the platinum group potential of the Duluth Complex. Altoro has started a 4 hole 2,000 metre stepout drill program on the Birch Lake platinum zone in an effort to expand the 4.2 million tonne platinum bearing zone.
This exploration program alone does not justify my reaching to $0.61 to buy Altoro. I reached because I have a hunch that Ross Beaty intends to turn Altoro into a platinum group junior. Beaty has had considerable success developing Pan American as a silver concept vehicle on the speculative premise that silver will one day soar above $10/oz. Jim Blanchard's silver bonanza has yet to materialize, but Pan American has certainly been a profitable bonanza for all involved. The platinum group metals stand out among the metals in that they have been stable or trending higher during the past couple years. The world's primary sources for platinum group metals are Russia and South Africa. Russia is already undergoing infrastructural collapse, and South Africa is bracing for the political chaos that will inflame the post-Mandela era. Whether or not this happens and creates a supply shock for platinum and palladium production does not matter. It is a plausible story. Most commodity based stock promotions are based on the fear of what might happen, not what is actually happening. Chaos in Russia and South Africa, and the exploration and development of new, strategically safe reserves in North America has a nice patriotic ring to it. Of all the metals, the platinum group is the only one that catches the attention of speculators as a genre. Having exposure to a platinum group bottom-fish portfolio was thus a necessity. The only other two choices on my 1999 list were Birch Mountain and Freewest. Birch Mountain's prairie gold story is controversial, and Freewest's platinum group prospect is just one of an assortment this toiling geologist company is exploring. Ross Beaty is no toiling geologist. In addition, Altoro has the backing of Rick Rule, the San Diego superbroker who would rather bet on a conceptual juggernaut than a drill hole. So Altoro is my platinum group sector pick. (Key Sector: Platinum Group)
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