Gold is down but one small gold explorer has found a way to get its share price up and that's by going straight to the bottom -- of the ocean.
Black Mountain Resources, a mining company which has achieved little in its four-years on the Australian stock exchange, delivered a remarkable 400% price rise last week by signing up for a place in a shipwreck salvage syndicate.
There's not much new about looking for sunken treasure but it is interesting that a company taking the risk of helping fund a search in the North Atlantic off the Irish coast would do better on the stock market than any of its rivals laboring under a gold price which seems poised to sink through the $1000 per ounce mark.
Driving A True Penny Dreadful
The percentage move in Black Mountain's share price looks much better than the rise expressed in dollars or, to be more accurate, cents, because the company is a classic penny dreadful which has found a way to be seen to be trying something different.
From less than 0.2 of a cent at the start of last week Black Mountain "rushed" all the way up to 1c, a price which is hardly newsworthy if not for the novel step away from conventional gold exploration in the ground to gold exploration in the ocean.
What makes this latest treasure hunt a little more interesting is that it has been launched just as the annual round of gold conferences kick off, first at the Diggers and Dealers forum in Australia's gold capital, the outback town of Kalgoorlie, followed next month by the Denver Gold Forum in Colorado.
U.S. Flavor At An Aussie Gold Event
The Australian event started with a distinctive U.S. flavor in the form of its opening speaker, the former U.S. presidential adviser, Gene Sperling, who pleased his hosts by suggesting that it wasn't all bad in the commodities sector and that China was unlikely to suffer a hard landing.
Sperling did not have much to say about gold, a pseudo-currency which is being battered by the rising value of the U.S. dollar and the promise of higher interest rates, perhaps sometime this year, a move which will further expose gold's Achilles Heel as an investment which does not pay any interest.
What gold speculators want, and they always outnumber more cautious investors at gold conferences, are stories like that being marketed by Black Mountain.
Gold Which Never Made It To New York
The first aim of the salvage project is to find up to 1.28 million ounces of gold said to have gone down in international waters with the S.S. Arabic in 1915 courtesy of a German torpedo. The ship was on its way to New York with gold being shifted out of harm's way in Europe.
A second target is the T.S.S. Hesperian which was sunk nearby with an estimated 482,261 ounces of gold on board. Both ships are said to be in water around 650 feet deep.
The value of the gold carried by the Arabic alone is more than $1.4 billion, at the latest gold price of about $1090/oz.
A Quick Answer To The Seabed Gold Question
In theory, the underwater gold hunt could be over in a matter of weeks as the position of both ships is known. If the gold can be located in the wrecks it could be recovered in a operation taking between six and either weeks.
Given the poor health of the gold market, and the weak prices of most gold exploration and production companies, the latest sea-bed search for gold is a splash of fun for a gloomy industry.