November 22, 2010
Suddenly I realized what he was on about. He had mistaken me for David Walsh, founder of Bre-X Minerals. Obviously he had been in Calgary a couple of days back, overheard me talking about gold, and for some reason assumed I was Walsh. He had probably seen pictures of him in the newspapers. I met Walsh in the early 1990s and knew the story. I also knew that he had been dead for almost 12 years. I certainly wouldn”t have said I resembled him.
My new acquaintance was clearly the worse for wear. He stank of bourbon and was sweating and aggressive. Fortunately, Joe doesn”t stand for any truck in his bar. Mr. Daniel C. Leghorn, for that he informed me was his name, was swiftly ejected into Madison Avenue’s cool night air.
“Remember the name, Mr. Welsh!” he yelled as he departed, “Daniel C. Leghorn. I”ll be back to haunt yer. Don”t you forget it now!”
I was sure that I wouldn”t but was hopeful that Mr. Leghorn would try to forget about me.
For those of you who have never heard of Bre-X, I write this as a reminder that gold mining can be a woolly business. The grass-roots speculative gold investor who dreams of reaping a fortune has to rely on a multitude of signals, estimates, and possibilities to make his dreams come true. The promise of what is termed “blue sky” proves alluring and often leads to disastrous consequences. It is the ultimate high-risk investment, except perhaps for backing restaurants, Tobagan goat races, or theater plays.
Compare betting on gold to betting on horses. To back the Kentucky Derby’s winner, it isn”t good enough to know which horse is quickest, although it helps. You need the weather to be right, the draw to be right, the jockey to be right, the trainer to be right, et cetera. It’s an even harder call when there are fences to be jumped and hurdles in the way.
In the story of Bre-X Minerals, the horse never even made the start.
Recently the stocks we have been following in this column have been enjoying a fine run of success, which is why it is worth remembering what can and does sometimes happen. Next week in Part II you can read the Bre-X conclusion.
For now, though:
Petra Diamonds are at 96p from 65p, a rise of 48% since August.
Aquarius Platinum is at 397p from 305p, a rise of 30% since September.
Kenmare Resources are at 27p from 19p, a rise of 42% since September.
Petropavlovsk PLC is at 998p from 939p, a rise of 6% since October.