MAKE 8 TIMES YOUR MONEY ON GOLD

By Teeka Tiwari
 Make 8 Times Your Money on Gold
By Teeka Tiwari
My friend D.C. weighs well over 300 pounds.
Needless to say, he’s a guy who loves to eat.
Which is why I found myself sitting tableside with
him in a dimly lit New Jersey chophouse on a recent
Friday night ordering—yet again—a second entrée.
D.C. always orders two entrées. And since it’s in my
best interest to keep D.C. happy, I oblige and do the
same.
The bill usually runs me about $700. But it’s a small
price to pay for what I get in the end...
You see, looking at D.C., it’s pretty obvious he’s a guy
who knows his way around a steakhouse menu.
What’s not so obvious is that D.C. happens to manage
nearly a billion dollars for some of the wealthiest
families on the East Coast.
Due to financial industry regulations, I’m prohibited
from revealing his real name. But I can tell you
this about him... He’s the most successful resource
investor I’ve ever met.
Over the years, D.C. has given me information that
resulted in millions in profit for my clients and my
readers. It’s not every day he dishes it out like this...
And it usually takes a nice meal in his favorite spot to
get him talking.
Recently, I spotted some interesting activity in the
gold markets. That’s why I found myself back at the
table with him... And writing about it to you.
In this Palm Beach Confidential special report, I’m
going to share with you what D.C. told me. And
believe me, you’re going to want to stick around...
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After spending the past few weeks researching, I can
tell you this: The information I’m going to share with
you has the potential to make you up to eight times
your money on a small gold play.
But before I get into that, I need to tell you why I
sought out D.C. in the first place.
A Track Record of Delivering
Monster Gains
I met D.C. through a mutual friend back in 2002. We
immediately hit it off.
At the time, D.C. believed China and India were about
to experience economic booms.
He said the booms would create a surge in demand
for industrial silver, which would lead to an explosive
move in the stock price of a tiny miner he was
tracking.
At the time, the stock was trading for about 70 cents
($7 split adjusted).
I thought he was crazy.
First, everybody “knew” silver was a horrible
investment. Second, at the time, I was managing
money for mostly audit partners at the biggest
accounting firms in Europe and Australia.
There was no way I could recommend a penny stock
to them. When it came to investing, these guys wear
belts and suspenders.
D.C. called me a name I can’t repeat in print. Then he
went on to explain how much of an idiot I was for not
buying.
 That’s what I love about D.C. He has no filter. That
kind of honesty is hard to find.
D.C., of course, was dead right. By early 2004, that
tiny company, Coeur Mining, had risen 1,200%.
This wasn’t a one-off deal either.
In 2003, D.C. and I had breakfast at the Four
Seasons on 57th street in New York City. While we
ate bagels, he gave me Devon Energy at $12 ($24
split adjusted).
By 2008, it was trading at $63 ($127 split adjusted).
Again, in 2003, over a plate of beef bourguignon, he
told me about Diamond Offshore when it was trading
at $20. It went to $160 during the oil rally of 2008.
When the dessert tray came out, he suggested I look
into Transocean Ltd. at $19. It went to $160 in that
same 2008 rally.
And while devouring a monster-sized plate of lasagna
in “Little Italy” in 2005, he pitched the irrigation
company Lindsay Corp. at $25. By 2008, it had shot
up to $120.
And the list goes on and on.
Over the years, D.C. has given me a dozen triple- and
four-digit winners.
I’ll tell you more about them in future issues. Here’s
what you need to know now: D.C. is our guy when it
comes to resource stocks.
Last Friday, we found ourselves in agreement about
one thing: Gold is about to explode higher.
And that’s coming from someone who had been
bearish on gold for years...
The “Anti” Gold Bug
I’ve hated gold for years.
The last time I went bullish on gold was September
27, 2007. I published an article simply titled “It’s
Time to Buy Gold.”
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At the time, gold was at $750 per ounce. I said it
would go to $2,000. It only went to $1,920. I haven’t
received any complaints.
But since early 2012, I’ve hated gold. It was nothing
personal. The charts were telling me that gold was in a
bear market.
I didn’t have to talk to hundreds of people or fly
thousands of miles to visit mines to know that gold
prices were in a downtrend.
Here’s why…
One of my secrets to making money is knowing when
to listen to industry experts… and when to ignore them.
When the charts say sell, I don’t bother trying to
contact industry experts to get their opinion. At the
top of a market, they’re all drinking their own Kool-
Aid and can’t see the forest for the trees.
Even really smart experts don’t always see the edge of
the cliff at the end of a raging bull market. Remember,
they’re not stock market experts. They’re experts in
their specific industries.
That distinction is a really important one to
remember. That’s why when the charts say sell, I
just get out. I put my market expertise above their
industry expertise.
But when the charts say buy, that’s when I reach out
to my expert network to help me find the best deals in
the field.
And now, the charts are signaling gold’s a buy...
This Gold Signal That Made the Hairs on My
Neck Stand Up
As I mentioned above, I got bearish on gold in 2012
because the chart action showed me the metal was
breaking down.
But recently, that’s changed.
A few months ago, I detected a trigger I haven’t seen
in years.
 But I prefer PNF charts because they’re
Gold Rallies, Then Falls better at trend detection. In essence, they
measure the “battle” between buyers
$200
Three failed tops in 2012
(demand) and sellers (supply).
Gold is in a clearly defined signal downtrend for gold
uptrend from 2010-12
$180
Because so few people today can read
$160 PNF charts, I have a big “edge” when it
$140
comes to technical analysis.
Price of GLD

$120 Just take a look at the PNF chart at the

$100
top left as an example.
Trend line remains unbroken
$90 It shows the relationship between buyers
$80 and sellers of the SPDR Gold Trust
$0
(GLD) exchange-traded fund. This fund
‘09 ‘10 ‘11
Year
‘12 ‘13 ‘14 ‘15 ‘16
generally tracks the price of gold.

Source: http://www.investorsintelligence.com
The blue lines represent demand, and the
red lines represent supply. As you can see,
the chart does a great job of showing the
Gold Breaks Out of Downtrend in 2016 uptrend and the downtrend in gold.

(Traditional PNF charts use X’s to

$200
Gold broke out of its downtrend represent demand and O’s to represent
$180
here. This is a bullish signal. supply. For clarity, we’ve replaced the
X’s and O’s with blue and red lines,
$160
respectively.)
$140
Price of GLD

$120
I like PNF charts for trend analysis
because they screen out a lot of the
$100
“noise” you get on a bar chart.
$90
Now, unless you’re an experienced
$80
technical analyst, you might not know how
$0
‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 to “read” this chart. But here’s what I see...
Year

From 2011-2012, gold made three tops

Source: http://www.investorsintelligence.com
without breaking out. This told me that
the metal was being sold on rallies.
I identified it using a special type of chart. It’s called
a Point & Figure (PNF) chart. I use these charts to And I saw gold making lower lows and lower highs.
analyze long-term trends. That’s a classic sign of a bear market. And that’s why I
hated gold at the time.
PNF charts are an arcane form of technical analysis.
They’re rarely used today because people believe But on June 24, 2016, something changed...
they’re too difficult to learn (they’re not).
Gold finally managed to break out above its five-year
Today, many analysts rely on bar and candlestick downtrend line. You can see that in the chart at the
charts. bottom left.

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 The green arrow points to the breakout in gold. As
soon as I saw it, I felt a rush of excitement.
This breakout tells me that gold has started a brand-
new bull market. And the ride is going to last years.
That prediction isn’t just based on the charts, though.
There are a couple of other powerful signs I’m seeing
in the gold market…
Two Converging Tailwinds Behind
Gold’s Rise
Two other major forces are lining up behind gold:
Historically low interest rates and the War on Cash.
Let’s deal with interest rates first...
[Editor’s Note: Since we published this report, some
prices and figures have changed. But the research
behind our thesis is still valid.]
Interest rates around the world are at historic lows.
In some countries, like Japan, they’ve plunged into
negative territory.
In the United States, interest rates on the benchmark
10-year Treasury hit a historic low of 1.37% on July 8,
2016.
In fact, over $13 trillion of global government debt now
has negative yields. That means borrowers are paying
governments to take their money. I know, it sounds
crazy… But this crazy policy is good for gold prices.
Here’s why...
Gold pays no interest. So, when institutions consider
buying gold, they pause. That’s because they have to
rely solely on capital appreciation to see any profits
from gold.
Here’s why that is important to know.
Throughout modern history, cash and cash
equivalents (such as bonds) have always paid interest
while you hold them.
That’s no longer true… And that is wildly bullish for
gold.
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Due to low and negative interest rates, it’s actually
cheaper to hold gold now than it is to hold cash or
bonds. Friends, that has never happened before.
So, what does this all mean?
Well, we’ll see a steady stream of institutional capital
flow into gold as banks, brokers, hedge funds, and
wealthy family offices start reallocating some of their
cash and bond assets to gold.
This inflow will increase demand for gold. And that
will boost gold prices. Let me show you how...
In 1960, 5% of global assets were in gold. And as
recently as 1980, 2.74% of global financial assets were
held in gold.
Today, just 0.58% of financial assets are held in gold.
That’s nearly a 90% decline from 55 years ago.
In other words, global investors have forgotten about
gold. But now, they’re reawakening to the metal. And
that’s good news for us...
The Growing Demand for Gold
Research firm BCG Consulting estimates there’s $156
trillion in global financial assets.
As I mentioned above, gold is a tiny 0.58% of those
assets. That means there’s $905 billion in gold today.
Gold’s recent high was in 2012 when it accounted for
0.85% of global financial assets.
If gold holdings returned to that level, an additional
$421 billion would flow into gold for a total of $1.3
trillion. That’s a 47% increase from today.
If gold allocations rise to 1.37% of global financial
assets—half the level of 1980—an additional $1.2
trillion would flow into gold... for a total of $2.1
trillion. That’s a 132% increase.
If gold allocations rise to 2.74% of global financial
assets—the same as 1980—an additional $3.3 trillion
would flow into gold... for a total of $4.2 trillion…
That’s a 365% increase.
 And if gold allocations rise to 5% of global financial
assets—the same as 1960—nearly $7 trillion in
additional assets would flow into gold. That’s a
whopping 773% increase.
Here’s what all of that means for gold prices.
If gold allocations return to 0.85% (2012’s level) of
global financial assets, that means there would be $1.3
trillion of assets in gold.
To get to that level today, the price of gold would need
to be $1,949 per ounce. That’s a 47% increase over the
current price of $1,330.
Here are the estimated gold prices we’d need to return
to previous gold allocation levels:
● At 1.37%, the price per ounce would be $3,142.
● At 2.74%, the price per ounce would be
$6,283.
● At 5%, the price per ounce would be $11,446.
As you can see, just a small increase in the percentage
of gold holdings could send gold’s price skyrocketing.
But historically low interest rates is just one catalyst
spurring demand for gold. There’s another catalyst
that will help drive prices higher: decreasing supply.
In 2015, gold demand was 4,250 tons. But supply was
just over 3,000 tons.
In dollar terms, there’s $182 billion in demand for
gold chasing $128 billion in supply. That leaves a $54
billion shortfall.
For more supply to come into the market to meet that
demand, prices will need to rise.
And supply is steadily decreasing… Gold discoveries
have been falling since the 1980s.
It’s all adding up to a massive explosion in the price
of gold. And that doesn’t even account for our second
tailwind...
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Gold’s Second Tailwind: The War on Cash
The second tailwind that will spur a rally in gold is the
looming War on Cash.
Central banks across Europe are making plans to ban
cash outright.
For instance, European Central Bank President Mario
Draghi has called for a ban of the 500-euro note. And
some countries, such as Denmark, are already laying
the groundwork for retailers to go cashless.
(I’ve written an entire report on the coming cash ban
and how you can avoid it. You can read it here.)
Gold will be a major winner in the coming cash ban.
People will flock to an asset that they can stash wealth
in anonymously.
Based on these two converging forces, my best
estimate is that gold will hit $3,600 per ounce within
the next five years.
That’s a 276% increase from its current price of
$1,330 per ounce.
And it’s not just me who’s calling it.
I told D.C. what I was seeing in gold... And that I
expected it to go to $3,600.
D.C. thinks my estimate is too low. He believes
negative interest rates alone will push gold to $5,000
per ounce.
“From your lips to God’s ears,” I thought to myself.
“We’re about to make a lot of readers a lot of money.”
I’m Tapping My Network of Experts to Find
You the Best Deals
As soon as I started seeing these signs in the gold
market, I switched into what I call relationship-mode
research. That’s when I dive deeply into my network
of experts in resource stocks.
These guys I talk to eat, breathe, and live resource
stocks.
 I don’t call them every day. But I do make sure I send
them a nice bottle of wine each year so they’ll take my
call when I do reach out.
And right now, I am reaching out like crazy.
I’m talking to analysts, geologists, corporate
executives, private client wealth managers, “gold bug”
hedge fund guys... You name it.
I’m calling and meeting them. I’m out there shaking
the tree on old relationships and creating brand-new
ones.
Now, throughout my weeks of research, I come across
a lot of different ways to play a big trend like this. But
here’s the thing...
I’m not able to deliver my very best plays to the vast
majority of readers. Let me explain...
Every so often, I come across obscure little plays
I get extra excited about. These are small stocks
that can move up hundreds of percent... But I can’t
recommend them for one big reason: They’re tiny.
Delivering a tiny small-cap play to nearly 125,000
readers in The Palm Beach Letter—Palm Beach
Research Group’s flagship newsletter—would be like
sending a pack of elephants thundering through a
mouse hole.
They would run the stock up so fast, no one could
make any money.
And that’s exactly why we created Palm Beach
Confidential.
In Palm Beach Confidential, you’re getting the
exclusive picks Tom Dyson and I come across in our
meetings with guys like D.C.
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Often, these are small hidden gems that have the
potential to make you a lot of money. But they may be
a bit riskier due to their small size.
Since they’re off the beaten path, it ensures we can
get in before the rest of Wall Street wakes up to them.
Just like D.C. did back in 2002 when he pounded the
table on Coeur Mining before it shot up 1,200%.
And so, that’s how I found myself back at the table
with my good friend D.C., ordering our second
entrée... and getting down to business yet again.
He hasn’t failed me yet. And he’s plated the perfect
opportunity for us this month...
The Best Way to Play Gold
Fourteen years ago, D.C. showed me how to make the
most money from a precious metals bull market. It all
comes down to something called “operating leverage.”
Now, this might sound complicated, but once you
understand how operating leverage works, you’ll see
why you must own this month’s recommendation.
Here’s how it works…
Regardless of the price of gold, producing mines
have very high fixed costs. All businesses have fixed
costs. They include salaries, rents, utilities, and other
operating costs to keep a business up and running.
When gold prices are very low, high fixed costs can
cause devastating losses for miners. But the blade
cuts both ways... When gold prices are high, profits
skyrocket.
(For a more detailed explanation of how operating
leverage works, read the example in the box below.)
 The Power of Operating Leverage Remember, that’s with gold trading at $1,150 per
ounce.
Here’s an example of how operating leverage
works... We’ll use a hypothetical company called Now, what if gold jumps about 22% to $1,400 per
Gold Inc. ounce?

Let’s assume it costs Gold Inc. $900 to produce
one ounce of gold. And let’s assume Gold Inc.
mines 200,000 ounces of gold per year. We’ll set
the company’s fixed cost at $30 million per year
(salaries, rents, utilities, etc.).
Based on those numbers, the company’s pro-
duction costs would be $180 million per year
(200,000 times 900).
Now, let’s say the price of gold is at $1,150 per
ounce.
If Gold Inc. sells 200,000 ounces of gold at $1,150
per ounce, it would generate $230 million in reve-
nue. To get its operating profit, you would subtract
production costs ($180 million) from revenues
($230 million).
That would give Gold Inc. $50 million in operating
profits.
A 22% move up in gold would increase Gold Inc.’s
revenues to $280 million per year (200,000 times
1,400).
It still costs Gold Inc. $180 million to mine
200,000 ounces of gold. But with revenues now at
$280 million, operating profit increases to $100
million.
That’s a 100% increase in operating profit from
when gold was at $1,150.
But here’s where operating leverage comes in…
Remember, fixed costs remain at $30 million.
They don’t change. But the company’s operating
profit has increased to $100 million.
When you subtract fixed costs of $30 million from
the new operating profit of $100 million, you get
pretax income of $70 million.

Next, we’ll get the company’s pretax income. To do So, a 22% increase in the price of gold can lead to
that, you’d subtract operating profits ($50 million) a 250% increase in Gold Inc.’s pretax income (see
from fixed costs ($30 million). table below).

At a fixed cost of $30 million annually, Gold Inc. That, my friends, is the power of operating lever-
would generate $20 million in pretax income. age.

How Gold Prices Affect Operating Leverage

$1,150 Gold Price $1,400 Gold Price Percentage Change

Revenues $230,000,000 $280,000,000 22%

Production Costs $180,000,000 $180,000,000 0%

Operating Profit $50,000,000 $100,000,000 100%

Fixed Costs $30,000,000 $30,000,000 0%

Pretax Income $20,000,000 $70,000,000 250%

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 D.C. taught me that the key to this game is getting
in just as gold prices are getting ready to run. That’s
when the risk is lowest and the reward is highest.
That’s how he made a killing in Coeur Mining (CDE).
He picked a solid stock with massive operating
leverage.
And that’s how we’re going make a killing this time
around...
Operating Leverage Without
Operating Risk
Mining is a risky business. It’s full of delays, cost
overruns, government intervention, and labor
troubles.
The company I’m recommending in this special report
has designed a way to get all of the upside of owning
mining assets... without any of the operational (read:
costs) downside.
It’s a unique type of company that makes enormous
profits when precious metals prices rise... but faces
none of the operating losses when they go down.
And it’s a perfect investment for the huge gold rally
that D.C. and I see coming.
The company is called Sandstorm Gold Ltd.
(SAND).
Sandstorm is a “stream and royalty” company. These
types of companies provide financing to mining
companies. In exchange for financing, they receive
one of the following:
● The right to buy gold (or other metals) at a set
price over long periods. This is called a “gold
stream.”
● A percentage of revenue based on how much
gold the mine produces. This is called a
“royalty.”
Here’s what’s great about this model...
If the mine runs into problems or costs suddenly rise,
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the royalty company isn’t on the hook for any more
money.
That gives the royalty company huge operational
leverage.
Remember, royalty companies have the right to buy
precious metals at a set price... So, if gold doubles,
triples, or quadruples, the price they pay never
changes.
Even if a mine’s operating costs double, the royalty
company still gets its metals at the contracted price of
the original investment.
If costs rise, it’s the mining company’s shareholders
who have to eat the losses... while we get all the
profits.
It’s like scooping the cream off a bottle of gold-top
milk. We get fed first and everyone else eats second.
Operational leverage doesn’t get better than in the
precious metals royalty business. But that’s not the
only reason I like Sandstorm...
There’s something else we haven’t discussed yet… The
prodigy who runs the company.
The “Rock Star” of the Royalty
Company Business
When it comes to creating “hits” in the royalty game,
one name stands above all.
Nolan Watson.
Legendary resource investor Doug Casey describes
Nolan as “one of the smartest, most driven young men
you will ever meet.”
Every expert I’ve spoken to gushes about Nolan. And
it’s easy to see why. This guy is a phenom…
Nolan was one of the pioneers of the royalty-stream
model.
In his early 20s, he left a lucrative career with Deloitte
& Touche and joined mining legend Ian Telfar to start
a brand-new royalty company.
 It’s called Silver Wheaton. (And it’s the world’s largest
silver-streaming company.)
Nolan was employee No. 2 at Silver Wheaton... when
the company was nothing but a dream.
This can’t be understated: At the age of 26, Nolan
became the youngest CFO of a multibillion-dollar
NYSE-listed company.
At the time of this writing, Silver Wheaton has a
market value of $14 billion.
While Nolan was at the financial helm of Silver
Wheaton, investors saw their shares rise 1,700% in
less than three years.
Later, Nolan became actively involved in a sister
royalty company called Gold Wheaton. Within 2.5
years, he helped build, grow, and sell that business for
a 1,980% gain for his shareholders.
My Conversation With a Legend
in the Making
Nolan Watson is the real deal.
He is a man on fire. And he’s ready to make Sandstorm
the most profitable royalty company in the world.
His mission is for his shareholders to outperform
every other royalty company in existence.
He’s only 36 years old... My bet is he’s just getting
started.
Recently, I sat down with him for an insider’s look.
In 2009, after making billions in profits for
shareholders as the No. 2 guy at Silver Wheaton, Nolan
decided it was time for him to strike out on his own.
When I asked him why he left such a cushy gig at
Silver Wheaton, he told me…
“Sometimes in life, the worst enemy of the
best thing you could do is the second best
thing you could do... because it’s just good
enough to convince you to not take the risk
for the best thing.”
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That statement pretty much tells you everything you
need to know about Nolan.
There is an unquenchable fire that burns inside of
Nolan Watson.
You can feel it when you talk to him. We spent about
an hour together last week. We talked about his
past successes, what drives him, and his vision for
Sandstorm.
He believes, as I do, that the central bank-created debt
bubble is very bullish for gold.
He said his vision for Sandstorm is “trying to get as
much upside in... while mitigating as many downside
risks as possible.”
Nolan knows it’s a race to secure as many great assets
as he can before gold prices start to scream higher.
On that front, he’s winning. He’s already closed 131
royalty- and gold-streaming deals, with 74 of them
closing in the last 12 months.
He’s been active all over the world: 44% of the
company’s cash flow is from North America, 45% from
South America, and 11% from places such as Turkey
and Africa.
He’s doing deals with a who’s who of mining
operators... Companies such as Rio Tinto, Yamana
Gold, Kinross, and Glencore all do business with
Sandstorm.
Locating Great Assets at Bargain Prices
Part of Nolan’s special sauce is his ability to locate
assets that have been mispriced.
One of the ways he creates value for his shareholders
is to have his technical team find assets that have
tremendous “expiration upside.”
Here’s what that means...
Mines are valued by their expected output and
expiration (the estimated time it takes before the mine
is exhausted).
 A royalty company invests more money up front for a
mine expected to produce for 15 years than it would,
say, for a mine expected to produce for seven years.
“Expiration upside” happens when you buy a royalty
interest in a mine that ends up having a much longer
useful life span than expected.
So, if Sandstorm can find a mine that has been
mispriced for seven years of lifetime production but it
ends up producing for 15 years... it gets the extra eight
years of production for free.
You can think of it as a form of value investing.
And Nolan is always looking for assets that are
misunderstood and mispriced.
Just recently, he closed a deal on 52 royalty streams.
He told me about one particular mine that he was
especially proud of.
In his own words:
“There are a couple of unique, exciting things
that have been added to the portfolio recently...
that we got incredibly cheap that I think people
don’t yet understand how good they are.”
One of the assets he’s referring to is Hot Maden in
northeast Turkey.
It’s a mine rich in gold and copper. An average
mine might have one gram of gold per ton of ore.
Preliminary data suggests that Hot Maden has 13.4
grams of gold equivalent per ton.
I could hear the unmistakable hint of pride in his voice
when he said:
“It’s an incredible asset. We spent $3 million on
it and we think it’ll cash-flow at $6 million over
the next few years.”
In all, Sandstorm now has 131 royalty streams. Those
streams give it access to over 20 million ounces of
gold at $267 per ounce. Remember, gold is trading
at $1,330 per ounce. So, Sandstorm pockets the
difference.
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What that means to you is that as the price of gold
rises, Sandstorm’s stock price will explode higher.
Keep in mind, Nolan closed 55% of these deals in
the past 12 months. In short: Investors are just now
starting to cash in on these royalty streams.
How Sandstorm Can Return 8 Times
Your Money
With this information in tow—from both D.C. and
Nolan—there was one final step to check out.
Here at Palm Beach Confidential, part of our
investment success relies on our ability to get assets on
the cheap.
I want the plays that are off the beaten path... the ones
few people are paying attention to because buying on
discount means even greater upside.
Even though I have a proven track record with D.C., I
still do my own homework.
Whenever possible, I want to buy into deals cheaply.
Now, in a bull market, that’s not always possible. But
the good news is that the gold bull market is still in its
early “simmering” stage.
That’s one of the reasons why SAND is still trading at
an incredible discount.
That’s great for you because—as I wrote earlier—
buying on discount means even greater upside.
How big a discount is SAND trading for?
Royalty companies are valued based on their net
royalties. The average royalty company trades at 21.6
times net royalties.
As I write, SAND is trading at 15.3 times net royalties.
So, we’re able to buy the stock at a 30% discount to its
peers.
Another reason we’re getting it cheap is because
Sandstorm is much smaller ($876 million market
cap) than its main rivals: Franco-Nevada ($18 billion
market cap) and Silver Wheaton ($14.8 billion).
 And being small has its advantages.
Franco-Nevada and Silver Wheaton are looking for
billion-dollar mega deals.
When you’re spending a billion dollars, finding a
bargain is rare. Most of the time, you’re paying top
dollar.
Sandstorm, on the other hand, has the advantage
of doing smaller deals, which can be much more
profitable.
Nolan told me he’s not looking to be bigger than Silver
Wheaton and Franco-Nevada. His goal is to grow the
stock price at a faster rate than these two power houses.
That’s how he’s measuring success. And for our
purposes in Palm Beach Confidential, that’s exactly
the thing we’re looking to do.
At its current price of $5.16 per share, we’ll make 40%
if SAND just moves to a multiple of 21.6 times net
royalties.
[Editor’s Note: Since publishing this report, the
price of SAND has gone down. That means you are
able to purchase it at a greater discount. We still
believe in SAND’s fundamentals and our thesis. As
gold prices rise, so will SAND. ]
But I’m not buying this for a 40% move. I’m buying
this because I think gold is going to $3,600 per ounce.
If I’m half right, and gold only goes to $1,800 per
ounce, Sandstorm will be worth $10.85 per share, and
you’ll make over 100% in profits.
If I’m spot on, and gold makes it to $3,600,
Sandstorm will rise to $23.60 per share. And you’ll
make over 355% in gains.
But even that could be conservative…
Remember my friend D.C.? He’s been right so many
times, I can’t dismiss what he says. So, even though it
sounds extreme… gold could hit $5,000 per ounce.
And if he’s right, Sandstorm would rise to $33.51 per
share—a 550% gain.
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But there’s a case for gold going even higher than
that…
You see, our numbers assume Sandstorm just
maintains its current production rate of 45,000
ounces per year.
With 21 properties in development right now, that
number is going up. Nolan and his team believe they
can boost production to 65,000 ounces per year.
We’ve looked at the properties. We’ve talked to Nolan.
We’re confident Sandstorm can reach its goal.
If he could produce 65,000 ounces per year at $5,000
per ounce, SAND would be worth $48. That’s a
whopping 838% gain from today’s prices.
And don’t forget Sandstorm has another 90 properties
in the exploration stage. These properties are like
lottery tickets. They cost little but could pay off big.
So, what if Sandstorm does hit a lottery ticket?
It would add another 20% to the production total for
a total of 78,000 ounces. At $5,000 per ounce, that
would boost SAND north of $58 per share… and make
it an $8 billion company.
That’s a 1,025% gain.
I know it sounds crazy… but it’s not.
Remember, Nolan helped Silver Wheaton increase
its market cap from $500 million to more than $8.5
billion.
That’s a 1,700% increase.
He’s determied to do even better at Sandstorm. We
wouldn’t bet against him.
Let’s hitch a ride ith this “rock star” of the royalty
business and cash in on some of those profits with him.
Action to Take: Buy Sandstorm Gold Ltd. (SAND)
Buy-up-to Price: Visit our portfolio page for the price
Stop Loss: 52.3% trailing stop
Position Size: No more than 2% of your portfolio
Asset Class: Smart Speculations
 Note: Longtime Palm Beach Research Group
Smart Speculations. readers are familiar with our “Three-Legged Stool
With our Smart Speculation of Safety.” It illustrates the importance of stop
picks, we look for setups in losses, position sizing, and asset allocation. If you’re
the market that could give us new or need a refresher on this topic, click here.
100%-plus gains in six to 12 And to review our latest asset allocation issue and
months. We could trade options. We could short models, click here.
stocks. Or we could buy smaller-cap stocks that
have some new, promising technology that’ll
send shares soaring. But speculations are very
risky. That’s why we’ll always use strict safety
measures.

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