Back at the end of last decade (yes, that long ago) we found ourselves confounded when investors rhapsodized to us about the virtues of a company that then carried the portentous and momentous title, US Gold. The attraction of this stock was supposedly that it was run by Rob McEwen, a Canadian mining entrepreneur that we were reliably informed could walk on water. Despite the claims we were never able to see this stunt performed.
What we did see was our beloved Minera Andes taken over followed by an unseemly and rancorous shoving match with Hochschild Mining over the San Jose mine, a long and turgid legal dispute with TNR Gold over its back-in rights over part of the Los Azules project and a bunch of Nevada gold “assets” that supposedly had Closeology going for them.
With a billion dollar market cap and a pack of swivel-eyed loons as its most ardent supporters the stock had Short written all over it in letters as large as the Hollywood sign. The stock dutifully (and thankfully) drove off a cliff and we closed the theoretical position in our Model Portfolio and went off as happy campers. As for the embedded investors there was a long and painful wait as the chart below shows.
Peace eventually broke out in the relationship with Hochschild, while the Los Azules matter eventually played out the way TNR had hoped (and it converted its back-in right to an NSR and a payout in event of an asset sale). The name of US Gold was changed to distance the company from these assorted bun-fights and to trumpet ever louder the connection with Rob McEwen.
Never one to shirk from grand ambitions the company now has the goal to qualify for inclusion in the S&P 500 Index “by creating a high growth gold and silver producer focused in the Americas”. The company refers to Rob McEwen in its promotional materials as Chairman and Chief Owner, due to his holding of 25% of the company. “Chief Owner” is a neologism we have not heard before.