Small Cap Power spoke with Thom Calandra recently, editor of The Calandra Report, an investment newsletter. He previously co-founded and was founding editor of CBS Marketwatch, one of the world’s largest financial websites.
Small Cap Power (SCP): Gold started 2014 off strong but has since experienced a significant pullback. Why do you think this has occurred and where do you think the gold price will be at the end of 2014?
Thom Calandra (TC): I’m not a macro person in terms of secular moves. I think the technicians will tell you the rebound started in early January for the commodity of gold. I think US$1300 is probably fair value for now. But I know a lot of technicians who expect the price to be at US$1500 in about eight to 10 weeks.
SCP: I know you’ve written about biotech stocks in the past. Are there any stocks in this sector that you like at this time?
TC: Right now I’m following a company that’s listed in Canada called Stellar Biotechnologies, Inc. (OTCQB: SBOTF) (TSXV: KLH). The company harvests limpets (shell shaped sea creatures). The limpet’s protein, Keyhole Limpet Hemocyanin (KLH), is used in many medical trials. Stellar Biotechnologies looks as though it’s about to become a much larger company. There’s a big demand right now for these amino acids and proteins that are used in clinical trials. Stellar, in my opinion, more or less has the most developed business in harvesting and developing markets for the protein and for the limpets.
SCP: What do you think about some of these junior resource companies getting into the medical marijuana business? Are there any of these marijuana stocks that you would buy right now?
TC: I just found out about five minutes ago that a stock I own, Rango Energy, Inc. (OTCBB: RAGO), is now entering the medical marijuana sector. I until this deal happened I didn’t own anything in the sector. Even though I did inhale when I was much younger, I’m probably not going to inhale any of these medical marijuana stocks now. I don’t know that much about it and I’m not in touch with the sector.
I remember covering companies such as VenGold back at the turn of the decade in the 2000s and there was more than one gold company that wanted to become an online Internet company. Very few of them made money for their shareholders and few, if any, are out there today.
One thing I do want to talk about, though, is the Over the Counter (OTC) market in the U.S. that Canadians love to hate. It’s finally gaining a little respectability. The OTC market has three products – the OTC Pinks, the OTC QX, and the OTC Bulletin Board. Well, they’re now starting to brand themselves. I was in my car the other day and I could have sworn that I heard an advertisement for them on the radio. January, February, and March of this year was just amazing for many stocks on the Bulletin Board.
SCP: Are there any other stocks that you like currently?
TC: I just finished an amazing helicopter tour over the Arizona copper belt, where the Resolution Copper Mine is being built. The company I was looking at is called Desert Star Resources Ltd. ( TSXV: DSR). Desert Star optioned properties from two companies I love and own: Eurasian Minerals (TSXV: EMX), which is doing a great job of creating a royalty portfolio, and Pilot Gold Inc. (TSX: PLG). From the helicopter tour alone I bought 10,000 shares (laughs).
I’ll tell you something, you can make a case for copper getting much more expensive in the next 10 years. It may sound like a long time but remember anything that comes out of these porphyries that Desert Star is looking at probably won’t be a mine for 20 years.
I’m going to be back in Cambodia next week to look at one of my favourite gold companies, Angkor Gold Corp. (TSXV: ANK), which I own a ton of. There’s so few projects in that country and Angkor controls almost all of them, and one of them that they’ve joint ventured with an Indian company is going to be a mine by the end of this year. A nice gold mine with about 100,000 to 150,000 ounces a year.
SCP: Thank you for your time Thom.
TC: Not a problem.
