Insider Buys: Following Phillip Frost

By Randall Radic  JUL 18, 2012 4:05 PM

Billionaire Phillip Frost has increased his stake in a junior miner.

 


MINYANVILLE ORIGINAL Billionaire investor Dr. Phillip Frost has a very solid investing record and has made some interesting investments over the years.  In 1972, Dr. Frost and Michael Jaharis purchased struggling Key Pharmaceuticals, turning the company around.  The company was acquired by Schering-Plough Corporation for $826 million in 1986. One year later, Frost started a company called IVAX.  He sold IVAX in 2005 for $7.6 billion. He currently sits 188th on Forbes’ list of the richest people in America.

A quick look at Frost’s recent track record shows similar successes.  Frost owns 43% of a company called Continucare, which was just picked up by Metropolitan Health Networks (MDF) for the sum of $416 million. Along with that, Frost is the CEO of a company that goes by the handle of Opko Health (OPK).  Over the past 12 months, Opko’s stock has taken off, going from $1.80 to $5.40.  At the present juncture, Frost is the Chairman of Teva Pharmaceuticals (TEVA) and Ladenburg Thalmann (LTS).

Big Bet on Junior Miner

An existing shareholder of Pershing Gold (PGLC), Frost recently increased his holdings in the company as part of a private placement along with Coeur d’Alene Mines (CDE).  Coeur d'Alene purchased just under 11 million shares for $3.52 million and Dr. Frost purchased just over 1.5 million shares at roughly $500,000.  Dr. Frost joined in the private placement through Frost Gamma Investment Trust. With his recent play, Frost has a total of $9.8 million invested in Pershing Gold.

Frost Gamma Investment Trust’s investment in Pershing Gold looks to be protracted, akin to his investments in the pharmaceutical industry, although he trades shares regularly according to trends in the market.  Forms filed with the SEC indicate he recently purchased another million shares of Opko Health.   

Evidently, Dr. Frost thinks that Pershing Gold has something good going on.  And Coeur d’Alene Mines must agree with him, because the $1.7 billion US silver producer has rarely made strategic investments in what are referred to as “juniors” in the mining business. 

Of course, Dr. Victor Rudenno, one of the world’s leading experts in gold and silver mining, has stated that juniors present the biggest investment potential, if they hit. Some juniors have hit it big including  Ivanhoe Mines (IVN), which skyrocketed from $1.86 per share to $30 per share over a two-year period.  Another junior, ATAC Resources (ATC.V), began trading at $0.23 per share before soaring to $10 per share. 

Details on Pershing

Pershing has announced a new discovery located at its Relief Canyon property, and upped its land holdings from 1,100 acres to 24,000 acres.  The company also made an important strategic acquisition with the purchase of a $15 million processing plant at its Relief Canyon property.  In addition to its partnership wtih Coeur d'Alene, Pershing has signed deal with Victoria Gold (VIT.V) and Newmont Mining (NEM). 

The Newmont deal, instigated by Pershing’s CEO Stephen Alfers, has already resulted in encouraging Phase I drilling results.  Before taking over as CEO of Pershing in 2010, Alfers was CEO of New West Gold Corporation where, after developing a number of promising gold properties, he coordinated New West’s acquisition by Fronteer Gold for CDN $186.9 million.  Subsequently Newmont Mining Corporation purchased Fronteer Gold for CDN $2.3 billion last year.

In between his time at Fronteer and Pershing, Alfers served as chief of Operations in the US for Franco-Nevada (FNV), a $5.5 billion mining company.  To some interested observers, it appears Alfers took over Pershing Gold with the intention of converting it into a billion dollar company. Pershing Gold shares are going for around $.32.  This means that for pocket change any investor could follow the lead of  Dr. Frost.   

Twitter: @RandallRadic
No positions in stocks mentioned.