Five great resource finders & developers have just taken over this up-and-coming gold
producing company. Could this be the birth of a new mining giant?
Pan American Goldfields recruits
all-star dream team
By William Hope, Editor,
Stock Market News & Reports
I ve just returned from a a series of meetings in New York, where one of the hot topics was George
Young s latest move because a lot of people follow everything George does. After all, this is the guy
who put together the now famous Gualcamayo gold project ($1,00,000 turned into a half-BILLION
when the company was sold) was Founding President and Director of MAG Silver (35¢ IPO to
$16.40) has done many other big deals. And now that he has just taken over a young gold producer,
Pan American Goldfields supported by a very impressive team so naturally there s a lot of interest!
The consensus? Everyone thinks that George and his guys are using Pan Am as the foundation to build something
very big with new discoveries, naturally, but also acquisitions. And based on their track records, why not? It s their
lifelong M.O., and tigers don t change their stripes.
This will be a BIG story guaranteed and here s what I ve learned.
Dear SMNR Member:
Before telling you about Pan American Goldfields, it s important for everyone to remember this
Great mineral discoveries almost NEVER come from large corporations. They come from lone-wolf
geologists and exploration teams who have the guts to break out of the box and search where no one
has ever gone before.
People like David Lowell, one of the greatest gold-finders in history (multiple home-runs in Mexico,
Arizona, British Columbia and Chile) Forbes Wilson, who found the world s greatest single gold mine in
New Guinea (producing 1.7 million ounces of gold in 2010) V.A. Buryak in the 1960s in the old Soviet
Union (33 million ounce gold deposit) George Harrison, in South Africa s Witwatersrand Basin (1.3 billion
ounces of gold, and still going strong!) and others.
Call it luck, call it some kind of mysterious genius, call it whatever you want but people who make mining
history are a rare breed. And these people who ve taken over Pan American are cut from this same mold
which makes this a very big deal, but with something else added: There s also THE ART OF THE DEAL,
which is George s specialty.
All this you need to keep in mind, plus the importance of track records
Savvy hard asset investors ALWAYS follow men with great track records because history generally
repeats itself. Great discoveries and great deals tend to come from the same relatively few people. And
when so much talent gets behind a little-known gold producer, as in this case, then it s well worth
And I can tell you that things are moving fast at Pan American Goldfields..
They are already ramping up production, in Mexico s Sierra Madre Occidental Mountains, and there are
plenty of rumors about something big. Obviously I can t confirm a rumor, but these guys are famous for
giant resource plays look at their track record so IS a major deal imminent? I m no insider, so I don t
But I DO know their past histories, and you can draw your own conclusions. Now let s get down to
Pan American Goldfields current status
The initial share price upside is based on simply revaluing Pan American Goldfield s existing gold
reserves. This is done as it completes a feasibility study for the expansion of current gold production.
Like the Marine s KISS (keep it simple, stupid), the path to profits in this case is simple and straight-
Right now, investors are buying reserves currently valued at $30 per ounce, according to its share price.
If and when the company completes its feasibility study (which seems likely given the new management),
that would give investors a clear path to a proven probable valuation of $160 per ounce of reserves --
about four times the current valuation or share price.
Again, I DO NOT KNOW if this will happen. But if this does occur, then we may see Pan American s
shares dramatically exceed the initial upside target.
Birth of a mining giant?
I personally think that Pan American is one of, if not the most, undervalued, and overlooked gold
producers in the entire Western Hemisphere. Things will change but, right now, the company is
On target to triple gold production.
A low-cost producer. And low cost labor = low cost gold. Mexican wage levels are 80% below those in
the U.S. and Canada. And as these costs are rock bottom while production is expanding, those costs are
expected to drop to about $300 per ounce.
Its first mine (Cienguita) is situated in the world s fastest-growing gold region, in the legendary Sierra
Madre Occidental Mountains. (40 million ounces of gold already produced + 2 billion ounces of silver, and
that s barely scratching the surface.)
The company s main facility has (net) reserves of 400,000 ounces of gold. Do the math: 400,000 X $900
= $360 million. (Entire deposit exceeds a million ounces.)
Chairman Mario Ayub is one of the best-known, best-connected mining executives in Mexico. He is a
metallurgical engineer, former President of the National Mining Association of Mexico, and has
successfully put seven previous mines into production. Still in his 50s, this man is famous in Mexican
President George Young is an American metallurgical engineer, fluent in Spanish, with heavy experience
in the Americas. He was the Founding President and Director of MAG MAG Silver Corp. that rose from a
35¢ IPO share price (in Canada) to $16.40. He is also co-founder of International Royalty Corp. which
went public @ 40¢ and was just acquired @ $6 (share price high $9.15). George had the connections to
get IRC its interest in the Pascau-Lama, which is one of the world s largest gold mines. In total He was a
principle in 18 major mining developments. His record speaks for itself: this is a master deal-maker.
The Board has just been expanded (see boxes right) in a way that looks like a major mining play is in the
Deep discount to assets bargain priced, for now
I like to find companies that are trading at deep discounts to their actual assets.
I also look for hall of fame management teams and other catalysts that nearly guarantee a higher share
price in the near future.
Pan American does all this, and more. It is trading at $30 per ounce of gold for drill indicated/inferred
reserves. It is already producing gold and is doing a feasibility study to expand production at the
Cieneguita Mine from 18,000 ounces of gold next year (based on current run rate) to 100,000 ounces per
The first catalyst is the feasibility study, as moving Pan American s reserves to the proven/probable
category should cause an upward revaluation which should be reflected in Pan American s share price to
at least $160 per ounce or an increase of more than 400%. Keep in mind that in the meantime, a
Gualcamayo-like acquisition could fast track any share price rise.
Note that I am being very conservative when I give an initial upside of $160 for every ounce of gold in
reserves, and I am basing this on an independent engineering study compliant with government 43-101
regulations. History shows that much higher prices are achievable. In fact a recent study by Casey
Research shows the current average P&P value is over $200.
Further back, gold giant Barrick paid over $450 for every ounce in reserves when it bought Placer Dome.
Yamana paid just over $550 per ounce for Desert Sun. And when Goldcorp took over one of Pan
American s neighbors , Glamis Gold (they have a mine about 10 miles from the Cieneguita), it paid over
$600 for each ounce of Glamis reserves.
While being conservative, I think we are well justified in accumulating Pan American s shares using a
$160 for every ounce of gold converted to proven probable as an upside target. If Pan American s shares
move so that its valuation exceeds $160 to, say, a Yamana-take over price level of $550 per ounce, I
certainly won t complain.
A takeover down the road?
It should also be noted that that somewhere in the future, Pan American could be taken over by some
reserve-hungry giant like Barrick. This is not far-fetched. Recall that Company President George Young
has already seen three of his companies taken over, which made massive profits for early investors. (See
The first step to profits ...
For now, the first catalyst is Pan American s feasibility study and gold reserve valuation. The next step is
clear: George Young has recruited and assembled a team whose individuals are associated with giant
deals. So let these dealmakers do what they have done, time and time again, and perhaps we will see
profits closer to the level of George Young s last start up IRC (2,287%), or even more.
Serious investors have already begun buying Pan American Goldfields. (it trades on the OTC symbol
MXOM and on Germany s Frankfurt Stock Exchange symbol DE: OYA1).
Now it gets interesting!
The curtain is going up the Pan Am show is ready to start
Successful investors know two things about hard asset stocks.
FIRST, timing is everything and buying a stock too early is almost as bad as buying it too late. All too
often, the damn company never takes off and you re left with a loser.
SECOND, nothing is accidental, and those companies destined to fly high do so for one or more very
good reasons, all happening at the same time.
I believe that the facts surrounding Pan American Goldfields validate both points. This company has a
LOT going for it:
It s one of the newest and fastest growing gold producing companies in Mexico is hugely undervalued is
now controlled by one of the hottest management teams in the gold mining industry could be on the
verge of a significant acquisition and the coming few months should be enormously gold-friendly.
Is this the birth of a gold producing giant? The coming few months should tell us a lot but for now, just
as MAG s IPO price was 35¢, I think Pan American s share price of 30¢ is a rare bargain.
William Hope, Editor,
Stock Market News & Reports
P.S. Is Pan Am the ultimate insurance policy for these scary times?
After all, gold prices and market volatility are joined at the hip. They feed off each other, and when
something bad happens, the price of gold soars. So I ll close with this forecast
Israel will launch a major air attack on Iran s nuclear facilities sometime before the end of 2010.
All my contacts in the intelligence community including the CIA believe this will happen. They feel that
nothing will hold back the Israeli Government, which simply cannot live with a nuclear Iran that promises
to wipe Israel off the map.
If this massive air attack takes place and it will, I believe then the price of gold will pass $2,000 an
George Young s key role in the giant 11+ million ounce Gualcamayo
Viceroy s principal asset is the advanced xploration-stage Gualcamayo gold project in San Juan province,
Argentina, said Yamana Gold Corp., when discussing its $515 million takeover of Viceroy.
Viceroy Exploration acquired the Gulcamayo by taking over Oro Belle, of which it was already a
controlling shareholder. Incredibly, as Oro Belle s president, the very astute and well-connected George
Young had seen the Guacamayo s promise early and had managed to acquire it for less that $1 million in
Here is part of George Young s incredible
International Royalty Corp.
IPO $0.40 to $9.15 high
Mag Silver Corporation
IPO $0.35 to $16.40 high
Acquisition to takeover -
$1,000,000 to $515,000,000
Pan American s Dream Team highlights: William Hope s five great reasons to
buy Pan American Goldfields shares
BUY Reason #1
The Midas Touch: Metallurgist, corporate lawyer and now Pan American s President,
George Young was the Founding President of Mag Silver and IRC and he put together the
now famous Gualcamayo deal. He says his sole focus now is to acquire the next Gualcamayo
for Pan American Goldfields.
BUY Reason #2
Mine finder - mine builder : Head of Mexico s Ayub-Touche Mining Dynasty, and Pan
American s Chairman, metallurgist Mario Ayub s family has been mining for generations.
Ayub is the former President of Mexico s National Miner s Association, has already discovered
and developed seven mines and predicts he will find and develop more for Pan American.
BUY Reason #3
Geological expertise : Geologist and now Pan American Director, Gary Parkison discovered
The Terrazas, Mexico s largest silver-zinc deposit, and he identified and outlined the Cerro de
Marcado -- largest iron oxide copper gold deposit ever found in that country. Highly
respected, he was selected to oversee the economic assessment of the Metates: one of the
largest, if not the largest, disseminated gold deposits in the world.
BUY Reason #4
Management expert: Turnaround specialist and now Pan American director, Randy
Buchamer can count among his major successes (as its COO) Mohawk Oil s return to
profitability and later heading negotiations for its sale to a company controlled by Asia s
richest man: multi-billionaire Li Ka Shing. Mohawk is not the only major corporation he has
overseen. A highly astute but hard driving manager, he was previously the Managing Director of the $7
billion, 25,000 employee privately owned Jim Pattison group, in Vancouver, B.C.
BUY Reason #5
Deal finder - deal maker: In the 1990s Neil Maedel grew rich and famous for finding deals
like Arequipa (huge gold discovery), or gas field developer Ultra Petroleum Petroleum --
which rose a respective 4,923% and 35,000%. Most recently he was on the board of
directors of Manas Petroleum, overseeing its business development when it acquired what is
arguably the largest onshore oil exploration play in the world. That play is now funded by
billionaire George Soros. Maedel thinks big and goes after big deals, we can t wait to see
where he ll be going with Pan American. (Became a director in July 2010.)