This Genius Billionaire Made a HUGE Bet on This Canadian Gold Miner

Eric Sprott’s bet on Teuton Resources Corp. (TSXV:TUO) should put the company on every gold investor’s radar. 

| More on:
Gold bars

Image source: Getty Images

Eric Sprott, one of Canada’s most successful entrepreneurs and investors, has taken a huge stake in a little-known gold mining company. Retail investors could take a closer look to see if this stock represents a golden opportunity for wealth creation. 

About Eric Sprott

Little is known about Sprott besides the fact that he started his career as an analyst with Merril Lynch before launching his own investment firm. 

His Toronto-based asset management firm Sprott Inc. is now a $1.4 billion public company, while his alma mater Carleton University has renamed their business school, the Sprott School of Business. Sprott Inc. now focuses on equity investments, lending, corporate services and brokerage. 

Sprott himself focuses on an entirely different asset class: gold. Worried about the state of the global economy in 2007, Sprott stepped down as the CEO at Sprott Inc. (although he retains the chairman’s seat) and decided to invest 90% of his assets in gold and silver. 

In the 2008 financial crisis, his net worth jumped alongside the market price of this precious metal. This year, again, Sprott has added millions to his wealth through his gold holdings. Forbes now estimates his net worth at well over $1 billion. 

Rather than diversifying away from this core asset, Sprott has been doubling down this year. He made a huge investment in a little-known Canadian gold miner: Teuton Resources Corp. (TSXV:TUO).

About Teuton

Victoria-based Teuton is a small gold mining company focused on the Golden Triangle area of northwest British Columbia. Previously remote and inaccessible, the Golden Triangle region is said to be the largest deposit of precious minerals and metals in the world. 

Despite decades of discoveries and mining in the area, estimates suggest that only 0.0006% of the total reserve has been depleted so far. Teuton owns and operates 30 properties in this prolific region.

Eric Sprott started accumulating a stake in the company and boosted his holdings this year by several millions. He now owns 20% of all outstanding shares. That makes him one of the largest external investors in the small mining firm. 

Since March, Teuton’s stock has skyrocketed 1,100%. It’s currently worth $200 million, many times greater than its annual revenue or profits till date. However, if the company finds a major gold deposit at one of its sites and if the price of gold continues to rally higher as it has throughout 2020, the stock could have much more upside left. 

Experts believe that the surge in government debt and money printing policies across the developed world could devalue currencies. If the Canadian and U.S. dollar lose value post-pandemic, investors could turn to gold as a safe haven asset. That could propel stocks like Teuton much higher. 

Bottom line

Coattail investing, or following the moves of the so-called “smart money,” is  a great way to gain insights. This time-tested strategy could help you gain the advantage professional investors have over most other investors. 

Sprott is a billionaire investor who’s built two investment companies. He has devoted the majority of his wealth to gold investments and should serve as a benchmark investor in the sector.

Eric Sprott’s bet on Teuton Resources Corp. should put the company on every gold investor’s radar. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned.

More on Investing

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

The Top Canadian REITs to Buy in June 2023

Canadian investors looking for passive income from real estate investing can consider these top Canadian REITs for monthly income.

Read more »

Aircraft wing plane

Are Airline Stocks a Good Buy in June 2023?

Airlines like Air Canada (TSX:AC) still haven't recovered from their COVID-19 era slump. Are they buys today?

Read more »

A worker drinks out of a mug in an office.

Ready to Invest With $5,000? 3 Stocks for June 2023

Here’s a list of three top stocks that any long-term Canadian investor would be wise to have on their watch…

Read more »

tsx today
Energy Stocks

TSX Today: What to Watch for in Stocks on Monday, June 5

An early morning rally in oil prices could lift TSX energy stocks at the open today.

Read more »

Retirement plan
Dividend Stocks

Planning for Retirement? Here Are the Best Canadian Dividend Stocks to Buy

Buying two of the best Canadian dividend stocks now for the long term can help you retire without financial worries.

Read more »

investment research
Dividend Stocks

A Dividend Giant I’d Buy Over TD Bank Stock

Energy and financials are the TSX’s sector heavyweights, but I’d choose a dividend giant in the former over a big…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

2 Dividend Stocks Worth a Permanent Spot in My TFSA

Restaurant Brands International (TSX:QSR) and Berkshire Hathaway (NYSE:BRK.B) are two of my top TFSA holdings that I intend to hold…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Don’t Avoid Bank Stocks! This 1 Actually Has Massive Long-Term Potential

Some investors have said that it's a good time to avoid bank stocks. Here's one bank you shouldn't avoid. Buy…

Read more »