This Is Just the Beginning

100-to-1 gains don’t come along very often.

But all it takes is one. A once-in-a-generation trade that can turn dimes into dollars.

It’s something Ian McDonald and Kerry Knoll learned well when it happened to them.

McDonald was a stockbroker working in Toronto in the 1980s. Knoll happened to be a reporter writing about mining companies.

At some point, they got together and decided it would be a great idea to start a gold mining company.

If you know anything about the gold mining business, you understand that’s a terrible idea in general. There’s a reason why Mark Twain famously said, “A gold mine is a hole in the ground with a liar standing next to it.”

It’s notorious for burning up capital only to see many projects—and their investors—go bust.

But that didn’t deter McDonald and Knoll. So they forged ahead with Glencairn Gold in 1987.

It wasn’t always easy.

Glencairn Gold had its ups and downs. But eventually, McDonald and Knoll prevailed. They helped build gold mines in Canada and Nicaragua.

They even spun off part of Glencairn into Wheaton River Minerals. Goldcorp bought Wheaton River for about $2.4 billion, then later merged with gold giant Newmont.

It was a nice score for McDonald and Knoll. Most people would be content with cashing out with millions in the bank.

But not McDonald and Knoll. In fact, they didn’t make their real fortunes with Glencairn. It happened nearly two decades later when they caught one of the greatest runs in commodities of the past 50 years.

In the late 1990s, McDonald and Knoll invested about $300,000 in a completely different type of business. Patent Enforcement & Royalties Ltd., or PEARL, initially helped small inventors defend their patents. In exchange for working on a contingency basis, they would take a cut of any successful lawsuit.

It was a gamble. But when you cut your teeth as a junior miner, everything’s a gamble. And at 22 cents a share, it was a calculated gamble.

After a few years, they realized the costs far outweighed the benefits. Time was not on their side. So McDonald and Knoll went back to what they knew best: mining.

In 2005, PEARL acquired an undeveloped molybdenum (moly) deposit called Davidson near Smithers, BC, in Canada. They paid $874,000 for the mine to get out of the patent enforcement game.

Some of you may know about moly. It can withstand extreme temperatures, so it’s useful in high-strength steel alloys. It’s also a form of fertilizer.

Back in the early 2000s, moly was trading around $2 per pound. No one was paying attention to it… except McDonald and Knoll.

Then came the boom. The moly market got hot trading up to about $40 per pound.

With Davidson in hand, they made their first move. They rebranded the company to Blue Pearl Mining and raised some much-needed capital.

Within a year, the stock surged to $3.60 after some positive drill results. But that was just the warmup. 

Thompson Creek Metals, then North America’s largest moly miner, made a deal with Blue Pearl. As part of the deal, Blue Pearl received the rights to use Thompson Creek’s infrastructure to build a mill. That led to rumors of a merger.

Blue Pearl stock again spiked to nearly $7 per share on the rumor. What happened next was shocking. 

Blue Pearl, with just three employees and no revenue to speak of, made a $575 million bid for Thompson Creek.

It was a crazy idea. It was a coup. And it worked.

After the deal closed, they kept the Thompson name.

Not long after, the stock of the combined company surged to nearly $26 per share.

If you’re keeping score, that’s 118 times what original investors—including McDonald and Knoll—paid for shares of PEARL. Which means their original $300,000 bet turned into more than $35 million.

They hit it big for the second time. And it was all on the back of a massive upswing in commodities.

The point is, commodity rallies can mint fortunes. Catch one and it could set you up for life.

McDonald and Knoll’s story isn’t an isolated incident. It’s not even something that only happened in the moly boom of the 2000s. It’s a setup that’s happened multiple times over the last century. In multiple types of commodities.

Gold. Silver. Oil. Natural gas… You name it. When a commodity bull market shows up, it’s almost like owning a money printing press.

Long-time premium members of Strategic Trader know this first-hand.

Remember, last week in The Strategic Edge, I mentioned what’s happening in the critical metals space. And I told you how earlier this year, we recommended three different ways to play it that premium members are taking advantage of.

It was clear that President Trump and his administration made reducing reliance on foreign sources of critical metals a priority. Especially China, which essentially dominates the critical metals market.

What a difference a week makes.

Since we published that article, the government announced another investment in a critical metals company, Trilogy Metals. This time, the government is buying a 10% stake in the company. It owns the Upper Kobuk group of mineral projects in Alaska.

Shares of Trilogy are up over 200% since that announcement.

As I said last week, speculators are asking who’s next. And that’s continuing to power the entire sector higher. Including our three critical metals plays.

In just a week, those positions went from being up 374%, 370%, and 138% at the time to now being up multiples of that.

As I write, our three critical metals plays are up 1,009% (that’s 11 times your money), 855% and 570%.

Something we often say here at Strategic Trader is that things happen slowly at first, then all at once. These critical metals trades are prime examples of that.

Sure, there may be a little luck involved in seeing these picks surge that quickly. But we were also in a position to take advantage knowing that this was part of the playbook.

It’s the same type of position that McDonald and Knoll put themselves in when they set their sights on the moly market. And today, it may be just the start.

It’s not just critical metals that will benefit in this market. It’s also gold mining companies. Something long-time readers know all about.

Premium members had their fair share of winners in the gold mining space since we launched Strategic Trader more than six years ago…

…Including one gold company in our current portfolio that’s up 631% as I write. And another currently up 215%.  

But the bull run in gold looks to be far from over. Even after rising 150% in the past three years, gold continues to climb.

It’s one of the most beautiful charts in the world today. Yet most investors are still ignoring the space. Take a look at how much gold and gold miners make up of total global assets.

Historically, gold and gold miners made up a far larger percentage of investors’ portfolios. Those times are gone...at least for now.

But I believe that will eventually change as the bull market continues.

That’s all good news for speculators who think they missed the boat. And it’s good news for premium members of Strategic Trader.

In the next monthly issue—due out next Wednesday, October 15—we’re going to jump back into the gold space with a brand new pick.

And if this gold bull market continues as I expect, it may just follow the path of our recent winners in the commodities space. So if you’re not a premium member today, consider joining us as the commodities bull market rages on.

Regards,

Editor, Strategic Trader