My Best Idea of the Next 12 Months
By Dr. Steve Sjuggerud
June 8, 2007

"I just bought $30,000 worth of his stock," someone whispered in my left ear as we sat listening to a speaker.

Actually, it wasn't just "someone" that whispered in my ear. It was the CEO of a gold company.

You see, I was at the True Wealth Gold Conference in Long Beach last week, which I helped organize. We hand-selected the companies that we thought were the very best opportunities right now in gold and metal and invited them to present their stories. I thought there was a chance that one of these companies could make us many times our money in gold. It turns out, we found such a company...

The CEO who sat next to me during the presentation knows about gold deposits: I had personally invited him to speak at the conference, too! But once he heard that speech, he had to get in to the stock immediately – he couldn't even wait until the speech was over.

Then, in my other ear, S&A geologist Matt Badiali said, "The guy next to me already owns 35,000 shares of this stock... and he says he's buying more right now."

Back in 2005, I recommended shares of a little-known gold company, Seabridge Gold (SA). It was a risky recommendation... and I said as much. But I said that a $50 increase in the price of gold should translate into a double in the share price.

We got lucky... The price of gold has risen by $250 an ounce since I first wrote about Seabridge. And on schedule, shares of Seabridge are up 500%.

I believe this gold company – the one that generated all the excitement at our gold show last week - has the potential to be "the Next Seabridge."

You won't believe what this company has in the ground...

Around 2000, the "Next Seabridge" bought eight properties at the bottom of the market. It paid next to nothing for them. The properties were cheap because they were "discards" from gold mining companies. The mining companies knew the properties had some amount of gold, but thought they would never be profitable, so they didn't bother too much with them.

Of course, at the time, gold was selling for $250 an ounce, and it might have cost $300 or more per ounce to get the gold out of the ground.

The guys behind the Next Seabridge gambled that this was the bottom in gold. They acquired these properties, which would have been money-losers if they had tried to mine them at the time. They got lucky. Gold rose, and their gamble paid off...

Now, gold is nearing $700 an ounce. As the price of gold rose, the Next Seabridge started drilling these properties to see what it had...

Consider a gold deposit we'll call "Spot X." The Next Seabridge bought Spot X for $2.5 million back in 2002. Spot X turned out to be the largest undeveloped gold deposit in Canada and one of the largest in the world.

This project is worth more than $1 billion in cash flow, after all the expenses of building and operating a mine. And that billion-dollar net cash flow is based on a conservative gold price of $550, not the current price today close to $700 ($550 per ounce is the price major gold companies are using right now to evaluate future projects).

When this project was first announced in late 2005, shares of the Next Seabridge doubled from $5 to $10.

Yet the stock is still cheap. The Next Seabridge's stock market value – today - is less than half the value of this one property alone.

The Next Seabridge was incredibly lucky with Spot X. The chances of a find like that in the CEO's lifetime were slim to none. The Next Seabridge had acquired eight properties. So the big success at Spot X was like hitting a hole in one on one of only eight swings.

Then the Next Seabridge took another swing. It just recently started drilling at another property... we'll call it "Spot Y."

It hit another hole in one! Unbelievably, Spot Y has more gold than Spot X!

So now, Spot Y is the largest undeveloped gold deposit in Canada. Spot X drops to second place. The Next Seabridge now owns 100% of the two largest undeveloped gold deposits in Canada – which are also two of the largest deposits in the world!

Here's the thing: investors haven't figured out yet that they can basically have this huge gold deposit for free. The CEO only makes one presentation a year – at our annual conference – and this is a fairly small company. So word hasn't got out yet.

It will soon though and when it does, four times our money in the next two years might just be conservative.

If there's one thing I learned from the gold conference, even though gold is closing in on $700, there's still plenty of value to be found in the gold sector. In addition to some of the plays I mentioned on Monday, "The Next Seabridge" is a tremendous opportunity right now.

Good investing, Steve Editor's note: Steve Sjuggerud is a regular contributor to DailyWealth, a free investment newsletter focused on the world's best contrarian opportunities. We write with a simple belief in mind: You don't have to take big risks to make big money with your investments. Sign up today to read more investment ideas from Steve Sjuggerud.