Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944




January 24, 2014



52wk Price Range



100 M

Market Cap

$520 M 


The Critical Role of Gold and
The Formative Gold in the History of the Last 100 Years

One thing is sure – gold hasn’t disappeared. Periodically the media and politicians talk about the desirability of lower priced gold or the fact that gold will be nothing but a commodity, that it has no real significance. These statements fill up space in the world’s press,. They occasionally sound remarkably farsighted when made by politicians, but the fact remains that gold stays.

Gold came into my life after World War II when I discovered that my father put everything we had into gold. I saw then, at the age of 7 that Napoleon Gold, was superior to the Dollar, to the Pound Sterling, and the Swiss Franc. If I am correct, $14 was equivalent to one Napoleon Gold and I always thought that 14 is more dignified than 1 and since Napoleon represented only one person I shifted my support towards gold.

When I reached England in 1956, and actually went to South Africa in 1961 I experienced the effect of the Sharpervile shooting when gold skyrocketed. The world recognized the Sharpervile incident. The death of 71 innocent blacks created a run on gold and made the world recognize that a political crisis not only has political ramifications, but is also reflected in the price of gold. I recognized that there is what I call gold and that it has value and that many people have great interest in the yellow metal.

Quite frankly, when in the summer of ’61, I reached Johannesburg and spent 5 months there I saw the tremendous wealth in Johannesburg, in Cape Town and began to respect ownership of gold mining shares. I grew to respect a society, a country that is basically built on gold.

In fact in ’61 not only Johannesburg, not only South Africa but a large part of Africa depended on gold and seeing the prosperity it created , I began to believe that in gold we trust.

In 1974 I was lucky to be invited to testify in the legalization of gold. Congressman Gonzalez invited only three people – Secretary Simon, Vice Chairman of Solomon Brothers , Dr. Arthu Burns of the Federal Reserve and me.

I sat next to the Secretary who was a broker at some stage, who hit the table like a father educating his children, saying that it was high time that we put gold back to the commodity pages next to Pork Bellies where it belongs.

This idea sounded unusual and Secretary Simon hit the table like a good broker or rather a good manager of brokers. However, reflecting what he said, I realized he was right. Gold belongs next to the commodity pages except it is the most important commodity which Secretary Simon, couldn’t erase from people’s minds. He arranged a number of sales – 160,000 ounces at the time, but the so-called government Treasury sales were meaningless. After the 3rd sale, nobody noticed.

When President Nixon on August 15, 1971 closed the gold window, the fluctuation of currencies and particularly gold, didn’t know a limit. Whatever way we say it – President Nixon put gold back into the world’s front pages. When in 1982 I had a number of conversations with him and I explained how America could use its gold reserves to bankrupt the Soviet Union. This is when President Nixon stated “if I were President still, I would do it”.

Then we come to 2013/14. We have all sorts of currencies. We have all sorts of fluctuating currencies. We have all sorts of debts but something unusual happened to gold. Gold actually – or rather the yearly production of gold has gone out of style. Most people have run out of money to continue mining exploration and many have difficulties of getting together money in order to develop gold mines.Not many gold mining companies can even contemplate an increase of production except.

Sandstone as we describe in the article is one of the few finance companies who has the knowledge and intelligence of developed gold mines, gold reserves and has money – and access to money. The gold mining industry has shifted from production to finance. This is what the story is all about. Furthermore, it is our prediction that the story has just begun.


Nolan Watson,CEO


Would you have liked Balzac to write a book about you in business?


Would I like to write one myself?


No, no – Balzac was the French writer and when I think about your company I always think about Balzac. He lent money to people and took in a tremendous rate of return in a totally unstructured environment. Now you are in a structured environment but the concept is the same – no?


I think it sounds similar.


Okay then let me turn to reality. What is the basic concept of Sandstone?


The basic concept is you get an above average risk adjusted return for our shareholders. We try to expose them to the same upside that they would get if they invested in a mining company like expiration upside, like commodity upside, we try to not eliminate but reduce risk on the downside including capital expenditure overruns and capital overruns.


Basically your asset is money, correct?


Our asset is the ability to make money – yes.


But you start with having some money?




And you lend it, you give it to gold mining companies on certain terms which is built on receiving payments over periods of time lasting over many years. Sandstorm receives a set percentage of the production of the client company . Their income oscillates with the price of gold and silver. Accordingly, a higher price in precious metals represents increased revenues for Sandstorm. A currency crisis which we are currently witnessing is ideal for Sandstorm. Gold is the only safe refuge for currencies in crisis and this reflects in the future revenue stream for Sandstorm.


That’s exactly right.


What’s happening in the gold market today?


Well there’s a lot of things happening in the gold market today, but I think one of the structural things that we’re seeing is that there is a tremendous amount of demand for the physical commodity still coming out of Asia and the Middle East and that is being supplied personally by my supplies but also by liquidation of ETFs in North America. The ETFs can only liquidate for so much longer before there is no gold left in them so I think that it is not going to be too much longer before we’ve got more demand that we have supply.


Okay so let’s go back 5 years ago. Okay – you were in business 5 years ago, correct?


We were just starting a business.


What is the difference between 5 years ago and today on the gold market?


Well one of the differences is that right now people believe that the United States’ economy is going to be a roaring engine and solve all their financial deficit and debt issues and people think we don’t need gold anymore which I think is a faulty assumption.


So people in the last two years have forgotten about the deficit. And, the deficit is growing. So you have one factor which is unique in a way that we have never thought of a $23 trillion deficit.


Yes, it certainly is a very substantial amount deficit especially with the demographics that the US has – so much of their working population getting older.


So again in the last 10, 20 years you have the Far East – you have China who said look the Yankees are trying to push the dollars on us every day, let’s put 10%, 15% into gold and as a result there is a huge force to increase the price of gold because of demand. Correct? Government demands?




This has never been before.


Certainly on a scale that is larger than anything we have seen in the last several decades.


So here is one main factor. We have deficit. President Clinton said that when he left the country he left it with a trillion dollar surplus. Then we go into the Obama deficit and Obama says okay – the first thing we sort out – other problems other than the deficit, but the deficit is growing, growing every day.


Yeah, the deficit is – the actual deficit is stabilized, but the deficit is continuing to grow pretty quick.


Now as a result, the moment may come on January 21st, 2014 when there is a huge run in gold – 100 points – it is very simple. The traders all got together and they were buying American paper and converting to gold, correct? In can happen on the 21st of January or the 21st of the 2015 – and nobody knows it.


And certainly nobody knows the timing but it could happen.


Now you were talking the Middle East takes gold – now could you comment on the force of the ETFs.


I think the sentiments in North America is that all of the problems have been fixed in the US - $16 or !7 trillion debt is not a problem at all therefore we don’t need gold and so the ETFs are liquidating and they have been net sellers of physical gold for many months now and we can actually see and track pretty closely the price of gold has been directly related to the rate of the liquidation of ETFs.


The ETFs are a very big force – a growing force – no?


They are a very big force – they are becoming slowly a shrinking force of liquidation in the short term in the sense that the rate of liquidation is going down and I think….


Now, how does the gold mining industry look currently? I mean what is happening to the major mines. What would they do today because of the conditions.


Well they are certainly not increasing production any right now.


They are not increasing production, so what does it mean in terms of the price of the securities?


I think generally speaking the gold companies have been trading off – they are very close to 52 week lows although the last couple of weeks we have seen a bounce off of that.


So in other words you have gold mining companies not increasing production. I talked to a Vancouver based mining company – well known - all I know it’s about 5 cents and they having meaningful reserves, and I asked them what they are doing . They said they are not doing anything because they don’t have the money to mine gold. This is a well-known company . I asked them what they are doing now and they told me they raised mony by selling 4 million 5 cents warrants to the directors and friends. They stated that soon they will have some money, but not enough for mining. Now isn’t this the best situation for you?


Yes – yes.


They should be calling you , I said listen - maybe you can make a deal because the only reason you don’t mine at the moment is that you do not have the money , but you have very good reserves.


I see – that’s what Sandstorm spends a lot of time looking for – situations where companies do have economic good strong reserves that make sense to turn into a mine with a management team that is capable of executing and that’s our core strength. Although it is surprising how often when companies come to us with their technical information and we look through it and realize that the assets are really not as good as advertised but we’ve got to kiss a lot of frogs to find a price.


You have a company called Silvercrest. Could you kindly roughly describe that deal as a typical example.


Yes, Silvercrest is a Vancouver based gold and silver mining company with their main asset as a mine in Mexico that produces mostly gold but silver as well. So Sandstorm provided them with capital up front. When they went to build their mine they used our money to go build their mine, and now they are up and running cash flow positive, and our deal is that we get to buy 20% of the gold they produce at $350 per ounce. The difference between $350 and $1,200 whatever the market place is, is that’s our profit margin. Silvercrest gets to keep the other 80% of the gold and we did not do a deal on the silver so they get to keep 100% of all the silver.


Now this was a very big




Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.



Bunker Hunt Article
Posted October 27, 2014

Lamb Realty.
Posted October 15, 2014

Chiquita Brands International
Posted August 20, 2014

Emerson Radio
Posted August 24, 2014

Evercore Partners Inc.
Posted August 5, 2014

Moelis & Co.
Posted July 22, 2014

Torchlight Energy Resources, Inc.
Posted May 21, 2014

Andrew Racz
Posted May 19, 2014

Royal Nickel Corporation
Posted May 02, 2014

Recorded Interview Robert Schermer, CEO
Posted March 15, 2014

Cowen Group, Inc.
Posted March 5, 2014

Pacific Booker Minerals Inc.
Posted February 4, 2014

Sandstorm Gold Ltd
Posted January 24, 2014

Global X Gold Explorer ETF
Posted January 16, 2014

Bring Back Mr. Giuliani
Posted December 24, 2013

Gold Reserve Inc.
Posted October 15, 2013

Premier Diagnostics Health Services Inc.
Posted September 25, 2013

Almaden Minerals
Posted September 3, 2013

Electric Cars In New York City
Posted August 27, 2013

The World Without Gold
Posted July 2, 2013

Remembering Mr. Churchill
Posted June 10, 2013

Financial Transactions in the Digital Age
Posted May 15, 2013

Senator Chester Crandell ( R ) Arizona
Posted May 7, 2013

Explor Resources Exs V
Posted April 14, 2013

The Gathering Storm
Posted April 9, 2013

Vietnam - West of Hong Kong
Posted March 11, 2013

Vietnam – In Peace!
Posted February 26, 2013

Wisdomtree Investments Inc
Posted January 28, 2013

Explor Resources Inc.
Posted November 28, 2012

Oremex Silver Inc.
Posted September 18, 2012

Alphamin Resources Corp.
Posted July 26, 2012

Harvest Natural Resources
Posted July 20, 2012

The Man Who Was Created by Gold
Posted July 06, 2012

Recorded Interview With Zach Erdem, President
Posted June 20, 2012

Nortec Minerals Corp.
Posted May 01, 2012

The Fundamentals of Chesapeake Gold Corporation
Posted April 16, 2012

Jourdan Resources Inc. (JOR.V)
Posted March 20, 2012

Posted February 27, 2012

Gold Index Bonds - To Avoid the Money Traps
Posted February 2, 2012

Monarch Casino & Resort, Inc.
Posted February 01, 2012

QMC Quantum Minerals
Posted january 19, 2012

African Metals Corp.
Posted December 21, 2011

The Crisis That Almost Wasn’t
Posted December 7, 2011

Posted November 18, 2011

The Crisis That Almost Wasn't
Posted November 15, 2011

Ocean Power Technologies, Inc
Posted October 19, 2011

The Mongolian Economic Miracle
Posted October 12, 2011

H. Hunt
The Son of Bunker Hunt
Posted August 24,2011

Sandstorm Gold
Posted August 15, 2011

"Silver At $200
Posted July 29, 2011

"First Majestic Silver Corp
 Posted July 26, 2011

"Interview with Brian Kirwin,
American Bonanza Gold Corp"

Posted July 21, 2011

"Interview with Ian Foreman
Yale Resources Ltd."

Posted June 16,2011

"Interview with Brandon Mckee
Callinan Mines
By Andrew Racz "

Posted June 1, 2011

"Andrew Thompson Interview Soltoro Ltd."
Posted May 15, 2011

"Great Panther Silver Limited"
Posted March 29, 2011

"The 21st Century's Marshall Plan"
Posted March 17, 2011

"Interview With
Houston Hunt"

Posted February 23, 2011

"Esperanza Resources Corp."
Posted February 23, 2011 

"Douglas Lake Minerals"
Posted January 11, 2011 

"Do not bet against Casablanca"
Posted December 10, 2010 

Posted December 8, 2010 

"Full Circle"
Posted November 19, 2010 

Posted November 8, 2010 

SilverCrest Mines, Inc.
Posted October 26, 2010

Cache Exploration, Inc.
Posted October 22, 2010 

Silvore Fox Minerals Corp.
Posted September 29, 2010 

Almaden Minerals, Ltd.
Posted August 16, 2010 

"The Path Of A Hungarian Immigrant"
Posted August 12, 2010 

"Interview With
Mark Hazout -
Silver Dragon Resources

Posted June 24, 2010

"Who Owns Whom At The Final Tally"
Posted June 15, 2010 

"The World Needs
Bunker Hunt.

Posted May 24, 2010 

"Arafura Resources "
Posted April 15, 2010 

"MF Holdings LTD"
Posted April 7, 2010 

"Quest Uranium Corporation"
Posted April 5, 2010 

"Lynas Corporation, LTD"
Posted March 19, 2010 

"Rare Element Resources LTD"
Posted February 9, 2010 

"Mexco Energy Corporation"
Posted January 4, 2010 

"Claude Resources"
Posted December 16, 2009

"The Silver Spirit"
Posted November 25, 2009 

"... from Casablanca to Monte Carlo."
Posted November 20, 2009 

"Sutter Gold Mining, Inc."
Posted November 16, 2009 

"Whose Friends Are They Anyway?"
Posted November 4, 2009

"U.S. Energy Corporation"
Posted October 28, 2009 

"Harris & Harris"
Posted October 13, 2009

"They Made A Difference"
Posted September 30, 2009 

"Bridge Bancorp, Inc"
Posted September 22, 2009 

"Entree Gold - September 2009"
Posted September 3, 2009 

"Who Lost Mongolia"
Posted August 16, 2009 

"Mongolian Prime Minister Sanj Bayar -
A politician of the 21st century"

Posted July 16, 2009 

"Romios Gold"
Posted July 7, 2009 

"The Grand Alliance"
Posted July 6, 2009 

"Sandstorm Resources, Inc."
Posted June 22, 2009 

"Ireland, Inc."
Posted June 16, 2009 

"The Brave New World! - Gold at $1000"
Posted June 5, 2009 

"Claude Resources, Inc."
Posted May 28, 2009 

"Bullion Management Group"
Posted May 11, 2009

"Golden Hope Mines, Inc. - Retraction"
Posted May 4, 2009 

"Silvercrest Mines, Inc."
Posted April 1, 2009 

"Silver Dragon Resources"
Posted February 27, 2009

"In Gold We Trust"
Posted February 26, 2009

"Entree Gold: An Unusual Asset Accumulation"
Posted February 20, 2009 

"The Ultimate Colorful Fate of Edmond Safra, Bernie Madoff, and Governor Bill Richardson"
Posted January 12, 2009

"Silvermex Resources, LTD"
Posted December 13, 2008 

"Prime Minister of Mongolia"
Posted December 11, 2008 

"US Gold Corporation"
Posted December 1, 2008 

"Rubicon Minerals"
Posted November 5, 2008 

"Gold Coins & The Money Game"
Posted October 29, 2008 

"Gold and the Chinese Millennium"
Posted October 20, 2008

"JNR Resources, Inc."
Posted September 30, 2008

"Three Immigrants In Front Of The Court"
Posted September 24, 2008 

Walter J. Hickel Interview"

Posted September 11, 2008

"The Alaskan Queen"
Posted September 9, 2008 

"Evercore Partners, Inc."
Posted September 3, 2008 

"Stalin In The
White House"

Posted September 2, 2008 

"Cal-Maine Foods Inc."
Posted August 4, 2008 

"The Mongolian Revolution"
Posted July 10, 2008 

"Mongolian Newsletter, First Edition"
Posted July 2, 2008 

"Goldsource Mines, Inc."
Posted July 1, 2008

"The Douglas Lake Story In The Age Of Fear"
Posted June 25, 2008 

"Mongolia: The 10th Richest Country in the World"
Posted June 10, 2008 

"North American Gem, Inc."
Posted June 5, 2008 

"The Emergence of Tanzania"
Posted June 4, 2008

"Tanzania - An Up & Coming Mineral & Agricultural Producer In Africa"
Posted June 2, 2008

"Western Potash Corp.

Posted May 12, 2008 

"Judy Garland &
The Subprime Crisis"

Posted April 29, 2008 

"Altek Power Corp."
Posted April 27, 2008 

"Letter to Prime Minister of Mongolia"
Posted April 24, 2008 

"The Mongolian Manifesto"
Posted April 4, 2008 

"Prime Minister Sanj Bayar of Mongolia Receives The Nobel Peace Prize"
Posted March 17, 2008 

"Olympus Pacific Minerals, Inc."
Posted February 28, 2008 

"Tanzania Gold - Douglas Lake Minerals - Harp Sangha"
Posted February 21, 2008

"Warren Buffett Receives A Call From Franklin Roosevelt"
Posted February 19, 2008

"Gold At 2000!!"
Posted February 14, 2008

"Entrée Gold, Inc"
Posted February 11, 2008

"The Unexpected
Mongolian Dilemma"

Posted February 2, 2008 

"Mongolian Gold"
Posted January 8, 2008

"Sir, Do Not Abdicate"
Posted December 27, 2007

"No More Munich -
The Mongolian Version of 1938"

Posted December 11, 2007

"Watergate Saved Nixon's Life"
Posted November 28, 2007

"The Mongolian Wakeup Call"
Posted November 16, 2007 

"Sanj Bayar -
The Prime Minister of Mongolia"

Posted November 15, 2007 

"Stalin & Chavez"
Posted November 9, 2007 

"Tagish Lake Gold Corp."
Posted November 1, 2007 

"Gold Indexed Bonds"
Posted October 11, 2007

"Jasper Mining Corporation"
Posted September 27, 2007

"Ghengis Kahn Returns"
Posted September 27, 2007

"Interview with Professor William Pfaffenberger - Torch River Resources"
Posted September 22, 2007 

"Interview with
Jim Davis - President of Leeward Capital Corporation"

Posted September 4, 2007 

"Interview with
David Hjerpe - Newmac Resources, Inc."

Posted August 27, 2007 

"The Age of Special "Corporate" Relationships"
Posted August 23, 2007

"Entrée Gold Inc."
Follow Up Report #1

Posted July 24, 2007

"Aldershot Resources Ltd."
Posted July 16, 2007 

"Portal Resources"
Posted June 12, 2007 

"Ghengis Kahn Was Hungarian"
Posted May 31, 2007

"Bayswater Uranium Corp."
Posted May 30, 2007 

"Brilliant Mining Corp."
Posted May 22, 2007

"Golden Valley Mines, Ltd"
Posted April 21, 2007

"Warren Buffett - Franklin Roosevelt"
Posted March 15, 2007

"Rubicon Minerals Corp."
Posted March 1, 2007

"Robert Friedland -
The Man of The Year"

Posted February 21, 2007

"Lexam Exploration, Inc."
Posted February 11, 2007

"My Father Died In Auschwitz"
Posted January 19, 2007

"WisdomTree Investments, Inc."
Posted December 26, 2006

"Entrée Gold Inc."
Posted December 13, 2006

"Aero Mechanical Services, Ltd"
Posted November 17, 2006

"This Year I"m Voting For Dick Nixon"
Posted November 7, 2006

"Global Options
Group, Inc."

Posted November 1, 2006

"The Arrival of the
Nickel Billionaires"

Posted October 18, 2006

"The Kennedy-Nixon debate revisited"
Posted October 4, 2006

"Brilliant Mining Corp."
Posted September 17, 2006

"A Matter of Reasonable Doubt"
Ken Lay - Enron

Posted August 30, 2006

"Silver Wheaton - SLW"
Posted August 28, 2006 

"Silver In The
Twenty-First Century"

Posted August 16, 2006

"The Age of Mediocrity"
Posted July 19, 2006

"Let There Be Sunshine"
Kirk Kerkorian

Posted July 12, 2006

"Oil & Gas
Energy Crisis Solution"

Posted July 3, 2006

"I Am An Immigrant!"
Posted June 7, 2006

"Northern Star
Mining Corp."

Posted May 19, 2006 

"Gateway Gold:
It"s A Gold Story"

Posted May 15, 2006

"Ken Lay's Legacy"
Posted May 8, 2006

"The Principal Guest Was Missing"
Posted April 25, 2006

"J.P. Morgan Offers Advice To Ken Lay"
Posted April 11, 2006

"Pocketful Of

Posted April 8, 2006 

"Midway Gold
Posted March 23, 2006 

"Harvest Gold"
Posted March 2, 2006 
"Sparton Resources"
Posted March 1, 2006 

"Interview with
Robert McEwen-
U.S. Gold Corporation
Posted February 22, 2006 

"A Tribute to
Rudy Giuliani
Posted February 15, 2006
"Your Money Is Not Yours"
-Enron & Martin Siegel, Esq.

Posted February 9, 2006

"Other People"s Money -Enron & Martin Siegel, Esq."
Posted January 28, 2006

"Northern Star Mining"
Posted January 16, 2006 
"Sonesta International Hotels Corporation"
Posted December 29, 2005 

"The Currency of Mass Destruction"
Posted December 5, 2005
"Bunker Hunt-Silver-China"
Posted November 28, 2005

"50 Relatives Worse Than Yours"
Posted November 14, 2005

"Then And Now"
Posted November 9, 2005 

"The Business of Hungary is Business!"
Posted October 31, 2005

"Mr. Prime Minister"
Posted October 13, 2005
"U.S. Gold Corp."
Posted September 29, 2005

Posted September 23, 2005

"Mr Clarke -
Call In The Boys"

Posted September 12, 2005
"A Letter To
President Bush"

Posted September 8, 2005

"Mr. Smith Goes To Hungary"
Posted September 1, 2005
"Orko Gold"
Posted August 18, 2005

 "Near Hit"
Posted August 16, 2005

"An African Queen"
Posted August 11, 2005

"1848 and Beyond"
Posted August 4, 2005



Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail:

Copyright © 2011 Andrew Racz. All Rights Reserved.