Sagebrush Gold (OTCBB: SAGE) (SAGE) and Levi Strauss

September 25, 2011
Volume
XIII, Issue 88

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Sagebrush Gold (OTC BB: SAGE) and Levi Straus

It’s an old metaphor, but it certainly applies here. As much as the world is different, tried and true ways to make money in small stocks have survived the test of time, and Sagebrush Gold appears to be a strong candidate for a big profit.

So, what do Levi Strauss and Sagebrush Gold have in common? Simple- they both knew how to make money from a Gold Rush.

Despite the recent pullback in the price of GOLD (which is likely to turn back up in short order), there’s a global gold rush going on out there. With GOLD around $1500 per ounce, it’s amazingly lucrative to pull the stuff out of the ground, and there are dozens of “light on their feet” junior mining companies moving to take advantage of these high prices.

It’s like a 21st Century version the California Gold Rush in the mid 1800′s.

Thousands of miners flooded the California mountains in 1849 looking to stake their claim and get rich. It was a hard lifestyle. So, how many of them got rich? Very few, but one guy figured out how to make a fortune without ever sticking a shovel in the ground.

Working with picks and shovels all day long was pretty rough stuff. Levi Strauss found some really tough fabric- Denim- and instead of sewing all the seams together, he actually riveted the fabric to make it tougher. To serve the 49er Miners, Levi Straus invented blue jeans- the first pants that would hold up longer in that hostile environment.

A few miners got rich, but Levi Strauss made more money than all of them. They all bought his denim jeans before heading up into the mountains. A few miners got rich, but the suppliers got stinking rich.

So, what does this have to do with Sagebrush Gold? Glad you asked.

Nevada has the richest gold deposits in the continental US, and there’s a bunch of junior mining companies staking their claims. They are a bit more sophisticated than the Miner 49ers, but it’s the same idea all over again.

Like Levi Strauss’s blue jeans, Sagebrush Gold has something they all will eventually need, and few of them have. Sagebrush Gold just dropped a cool $20 million on this facility, and it gives the company a competitive advantage in the junior mining world of Nevada.

Read on:

Sagebrush Gold (SAGE) Drops $20 Million on Gold Property and Processing Facility

 

On August 31 SAGE announced it dropped a cool $20 Million to purchase the Relief Canyon Gold Project in North Central Nevada- right in the heart of Nevada gold country. SAGE paid $12 million in cash, and the seller took $8 Million of the money in secured debt.

The Relief Canyon Gold Mine was operated by Pegasus Mining from November 1986 to September 1990, and is estimated to have produced 100,000 ounces of gold. At today’s price of about $1500 per ounce, it would equate to $150 Million in revenues. The company plans to mine in the existing infrastructure, and expand outwardly to a number of very promising areas in their immediate region.

In my view, what sets Sagebrush Gold apart from all the other Nevada based junior mining companies is the following. The Relief Canyon acquisition includes a complete processing facility! This is the one Junior Mining company that actually has not only the ability to mine for gold, but the ability to process it as well.

The acquisition included a primary/secondary crushing system, a screening plant, a portable conveyer, a leaching pad, pond/pipes and pumping, a processing plant, offices, and a warehouse.

The processing plant sets SAGE aside from all the other junior miners. There a dozens operating in the area, but none of the juniors have the processing facility.

When the Miner 49er’s headed into the mountains in the mid 1800′s, they had to stop and see Levi Strauss on their way to buy their denim blue jeans with the riveted seams.

Today’s gold rush miners need to get their ore processed. They’ll be stopping by Relief Canyon in North Central Nevada, and the company stands to make a fortune- just like Levi Strauss- without sticking a single shovel in the ground.

However, this company will be doing that as well.

The Sagebrush Gold “First Look”

$1.03 on Friday, but $1.50 back in June. In my view, the stock is going back to the $1.50 level it traded to in June in short order.

We have the “pole position” on this one. I expect hundreds of thousands of investors will learn about this company in the next few weeks, and OTC Journal members have the first look. That’s why I put this idea out on Sunday- to give you the first look.

NYXO, AAGC, TKDN, and GCLL- all profitable trading ideas in the last 4 weeks as I released from the Pole Position.

I see no reason why SAGE wouldn’t follow suit with all the others. Let’s make it 5 in a row.

SAGE is definitely separated from the pack with its processing facility and successful mining history.

Geologic estimates on their current resource is over 150,000 ounces of gold- $225 Million in revenues based on $1500 per ounce gold.

This company spent $20 million to purchase a “turnkey” operation, and it plans to turn the keys in very short order, so I suspect there will be a lot of activity and news flow coming out of this one in the near term.

I believe you can easily accumulate this one up to $1.15 to $1.20 this week, and look for $1.50 in the near term.

Remember, you have the pole position, so take advantage of it.

Accumulate up to $1.15. Short term target (30 days) $1.50. SSL: $.85- certainly worth a $.15 to $.20 risk to watch this stock head back to its previous high.

Let’s make it 5 in a row this week.

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