A Growth Industry and a Hedge for Wealth Preservation
he gold mining stock account offers you the following benefits:
Growth opportunities from new mine openings and cash flow
Value in the ground from billions of dollars of recoverable minerals
Hedge against inflation or economic uncertainty
Insurance against too much world debt and money creation
Peace of mind and a balance to your other financial assets.
Increasing demand from newly industrializing China and India
Portfolio Insurance with the most trusted of all global assets—gold
Your individual account will have a well-diversified and extensively researched portfolio of precious metal mining stocks. The account will be invested in large, medium and small mining companies with one thing in common - very large deposits measured in billions of dollars. We have no interest in risky small mining deposits or operations.
The Gold Mining Stock Account uses two proprietary in-house computer programs to arrive at valuations for mining companies. One program is designed for major and mid-tier producers and the other is for developmental companies. Qualified developmental companies are mining companies with a major project usually with $2-10 billion worth of mineral resources.
We believe our developmental mining company program is the most sophisticated program of it’s kind in the world. It encompasses over 240 separate line items of information on a mining company and each developing project. This allows us to do our own in-house geological and engineering assumptions between 9 and 18 months before guidance and certain important company information is verified.
We believe this program and 34 years of experience investing in this sector allows us a significant advantage to identify quality projects and companies early and at good values. The Account invests in large established companies and smaller companies with potentially very large and significant deposits of gold, silver, copper, zinc, lead and other metals.
Strict rules and regulations from the S.E.C and the Canadian authorities prohibit various corporate verifications regarding categories of resources and reserves and the economic viability of projects. Our 34 years experience in this sector and our extensive contacts with professional engineers and geologists allow us to run our own valuations and scenarios that can show a major deviation from the public market place valuations of a company or it’s projects. Sometimes the valuation by the market is too rich and we avoid these stocks. Many times the opposite is true and we take advantage of these situations.
The Account does not invest in any grass-roots exploration companies. This category is a crapshoot and is responsible for 99% of the bad reputation of the gold and precious metal mining sector. We only invest in companies that have properties with significant amounts of drill inferred resources. Usually our minimum cut-off is our own estimate of 2 million ounces of gold or $4 billion worth of potential base metals.
The Account invests across the spectrum of major companies as well as smaller companies, but only if they have in our opinion, substantial mineral values usually between $2 and $10 billion.
To protect assets from political, economic and monetary uncertainty and instability — including inflation or deflation and the repercussions of excessive government debt or currency depreciation — we offer our Gold Mining Stock Account. Given the rising levels of paper money, government debt and market speculation, an "unthinkable" economic accident could happen. History has shown that no matter what the economic situation, the long-term purchasing power of gold remains intact, which makes it a potentially important insurance or "hedge" for a portion of your net worth.
With the accelerating modernization of China, India and other developing countries, global demand for gold has significantly outpaced world mine output for many years, and we feel this established long-term trend will transform gold, silver and base metal mining into an attractive growth industry. China is now the largest consumer in the world of copper, zinc, lead, aluminum and soon nickel. A possible multi-decade demand increase in resources is developing that has never been experienced before.
Gold Equals Opportunity...
Jewelry demand for gold alone continues to exceed mine production year after year. As progress and industrialization spreads to more and more areas of the world, gold jewelry, even in small and seemingly inexpensive pieces, adds up to millions of extra ounces of gold demand each year. For seven consecutive years, gold jewelry demand alone has outpaced all world gold mine production.
Gold is also a time-honored global monetary asset. Government policies all over the world are many times devised for political gain, not economic health. Hence, in a world where in over 100 countries the local currency as a store of value is a speculation at best, gold is important. Various governments of the world continue to print money every day, to the tune of billions of dollars per week. By owning gold mining stocks, one in essence owns gold, an ideal investment in this climate. Globally the $170 trillion derivative market and in the U.S. the effects of a $7 trillion national debt are simply unknown, but a little caution never hurt when it comes to preservation of capital. Long term, gold has always proved itself to be a good place for a portion of one's assets.
Deflationary & Inflationary Hedge...
During the greatest deflation in our recent history (1929-36) gold mining stocks went up in value. Homestake Mining shares went from $40 in 1926 to $544 in 1935. Gold as a store of value (inflation hedge) also works well. For example from 1977 to 1980, when inflation averaged 9% per year, many gold mining stocks went up 3-5 times in value. Gold mining stocks offer investors an opportunity to own companies that literally are mining "cash."
The Undervalued Resource...
In 1973 the price of gold was $100/ounce and the Dow Jones was 1000 — a ratio of 1 to 10. Gold was undervalued. In 1980 the price of gold was $800/ounce and the Dow Jones was 800 — a ratio of 1 to 1. Gold was overvalued. At this writing gold is approximately $400 per ounce and the Dow Jones is approximately 10,000 — a ratio of 1 to 25. Gold is clearly undervalued again. This simple ratio compares the basic centuries-old yardstick of real asset value (gold) to a reliable index of corporate value (Dow Jones). Currently, the ratio shows gold to be heavily undervalued.
A Summary of Benefits of Your Gold Mining Stock Account Portfolio...
It is an excellent time to open your Gold Mining Stock Account and prepare yourself for what we believe will be a 5-10 year major bull market for gold investments. Below is a summary of the chief benefits to be gained from this type of account:
Gold Mining Stocks Offer Growth Potential...
Gold mining companies can increase profits substantially with no increase in the price of gold. Mining companies, by putting more mines into production, achieve higher revenues and profits when the new mines go on line. Expansion can also take place when mining companies renovate and upgrade existing mines and increase production.
Gold Mining Stocks Represent Long-Term Solid Value...
From a value standpoint, gold reserves in the ground are like having money in the bank. Also, most mining companies have properties containing a large gold resource which has been drilled and tested but not yet formally added to reserves. This represents hidden value not reflected on their balance sheets. Mining companies also own and lease vast tracts of potential mining land where gold has already been discovered, but where no advanced developmental work has been performed. As gold prices go higher or even remain level, many of these properties could become mines. These also are "hidden assets."
Allow Our Industry Experts, Engineers, Geologists & Consultants to Work for You...
Kenneth J. Gerbino & Company follows and studies the Canadian and North American as well as the Australian mining industries. We review and research hundreds of mining companies per year. Our exclusive and extensive database is updated by continuous survey of expert industry and company contacts. In addition to our in-house expertise, we have an extensive network of mining people, including engineers, geologists and consultants, to refer to when researching a company.
We feel that the price of gold will rise on balance throughout the next 5-10 years as global jewelry and investment demand continues to far outpace world mine supply. Asian demand will also continue to accelerate, driven by population increases and strong economic growth.
The Gold Mining Stock Account will offer you exposure to gold, silver and some base metal companies that we feel have exceptional growth and value opportunities. This growth is based on the world demand for these resources and also because of the excessive amount of debt and currency increases (printing of money) that has prevailed globally, and in our opinion, to very dangerous levels. 
