Why Bob Moriarty Likes These Three Gold Companies

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Bob Moriarty of 321Gold sat down with Robert Sinn Goldfinger Capital to discuss the current state of gold, silver, and a few gold companies Moriarty believes are worth keeping an eye on. 

The two spoke about the Beaver Creek Precious Metals Summit, which Sinn attended. Sinn described how busy the conference was and how many people there had packed schedules. He said the summit's tone was very formal, and this is because while gold has hit US$2,600, the stocks have not followed. 

Bob Moriarty stated that he believes that we are just getting started with gold and silver. He stated, "Silver has just come along for the ride, and I think silver will go a lot higher, but US$2600 gold is just absolutely extraordinary." He opined that we will see a lot of mergers and takeovers in the future as the majors are "eating their young."  

Sinn commented that the merger and acquisitions cycle may be in an upswing. 

Silver

They then went on to discuss silver, which Moriarty described as "always the last to show up to the party." He went on to say that the biggest indicator of a massive bullish move in silver would be that the penny dreadfuls are not doing anything. 

Sinn reported that this could be for a myriad of reasons, including the high cost of capital and the poor performance of seniors in 2022 and 2023. He stated that once larger companies like Newmont Corp. (NEM:NYSE) hit higher, the juniors should follow, though he pointed out that while we are close, we are not there yet. 

 Moriarty agreed.

When Everyone Wants It, Sell It

In the interview, Sinn pivoted and asked Moriarty about his philosophy when it comes to buying and selling stocks.

He said, "Let's assume we are in a bull market in the junior mining sector; at some point, some of these stocks may be up quite a bit, and people may have profits on their hands. What are some sentiment tools that you look for when deciding when to sell junior mining stocks?"

Moriarty had a very direct answer, stating, "When everyone wants it." He went on to detail the current awful sentiment around juniors, which he is delighted by because, in his own words, he is a "contrarian." 

"When everyone wants to buy it like they did in 2008 and 2011, that is a good time [to sell] . . . You can never go wrong selling at a profit. If you don't sell at a profit, the only alternative is to sell at a loss. You cannot be a part of the herd; the herd always gets slaughtered. You have to be a contrarian rather than a victim."

Sinn then asked if it didn't matter how good the news is if everyone already owns it.

Moriarty said yes, you have to ignore the news at some point and sell when everyone wants it. 

The Best Mining Jurisdiction

Sinn then asked what would be the premier mining jurisdiction since this has been a hot-button issue. While self-admittedly very biased, Moriarty said he thinks the best jurisdiction would be Canada, with the United States (specifically Nevada) as a second.

He said the question that should be asked is who should be avoided, rather than who should be sought out. In terms of companies to avoid, Moriarty stated Mexico is not friendly at the moment as they have "cut their own throats" through resource nationalization, which "destroys the mining industry." He noted that this nationalization occurred in Bolivia in 1954 and has since taken 70 years to rebound (though it is a great jurisdiction now).

Among other companies to avoid, Moriarty listed Peru and Colombia. 

Then Moriarty pointed out an outlier as while Australia tends to be very good, the Australian juniors tend to have lower valuations. Canada seems to be the most popular pick.

When asked what specific area of Canada he likes, Moriarty pointed out the vast amount of gold in Ontario, but also brought up the great projects currently in the Yukon. 

Snowline Gold: A Slam Dunk for a Takeover

The conversation then pivoted to Snowline Gold Corp. (SGD:CSE; SNWGF:OTCQB) in the Yukon, which Moriarty believes is a "slam dunk for a takeover."

Moriarty mentioned they are getting US$85 an ounce but that he thinks they should be getting US$200 to US$400 in a takeover, and they're getting US$85.

The most junior exploration companies were getting US$100 back in 2011, he said.

Sinn said Snowline was a favorite of his. The company has a "beautiful ore body that could definitely fetch 200 an ounce but they need to derisk it further and there has been some negative optics in the Yukon in 2024 . . . they need to work through that and prove that they have strong support from the First Nations in their area. 

According to Snowline Gold, management and insiders own 28% of the company. 

17% is with institutional investors.

14.9% is with strategic investors. This includes B2Gold Corp. with 9.9% and Keith Neumeyer with 5%.

The rest is in retail.

The company has a market cap of CA$693.9 million, 158.4 million shares outstanding, and CA$63.5 million in cash. Perpetua Resources Corp. (PPTA:TSX; PPTA:NASDAQ)

Perpetua: A Bright Future for Antimony

Sinn then pivoted to Perpetua Resources Corp.'s (PPTA:TSX; PPTA:NASDAQ) Stibnite Gold Project in Idaho. 

The company recently announced its 2021 Modified Mine Plan for its Stibnite past-producing, gold-antimony mine in Idaho received authorization from the U.S. Forest Service (USFS).

"That's a big deal," Sinn said. "The state of Idaho is coming of age again," as it was once a big mining state in the late 1800s. This Stibnite project was mined for antimony in WW2, for which Sinn commented, "The U.S. Army left it as an environmental mess. Ever since it has been seen as a reclamation project, and Sinn commented that Perpetua had moved it back to being a permitted mining operation, with a large deposit of gold and antimony as well.

When asked his thoughts, Moriarty first commented on the recent news that China has restricted exports of antimony (which went into effect on September 15 of this year), which can greatly impact North American antimony companies, like Perpetua Resources.

According to Reuters, management and insiders own approximately 0.55% of Perpetua, and institutions own about 33.09%. Strategic investor Paulson & Co. Inc. owns around 40% of the company.

Reuters reports that there are 64.54 million shares outstanding and 64.19 million free-float traded shares. The company has a market cap of US$569.63 million and trades in a 52-week range between US$2.69 and US$9.28.

"I think there's a bright future for antimony if for no other reason than the geopolitical tensions between the U.S. and China," Moriarty said. Sitka Gold Corp. (SIG:TSX; SITKF:OTCQB; 1RF:FSE)

Sitka Gold: An Absolute Sleeper

Lastly, Sinn asked about companies Moriarty wanted to talk about before wrapping up. Moriarty turned this around and asked Sinn his point of view on Sitka Gold Corp. (SIG:TSXV; SITKF:OTCQB; 1RF:FSE) latest results.

Sinn said there was a lot of physical gold, and Bob pointed out it was a 708.6-meter hole, which appeared to be mineralized at 680 meters, with 40 examples of visible gold (VG) clustered near the bottom of the hole.

"It is my opinion that it is another valley deposit, and it is going to compare to Snowline," he said.

"And here's where it gets beautiful," he added.

"Sitka has a [CA$83.5] million market cap and 1.4 mill ounces in resources. Snowline has a [CA$693.9 million] market cap, and Snowline is worth 11 times more than Sitka, but I believe the assays out in two to three weeks are going to be a barn burner, and it's going to be an intercept of several hundred meters."

He continued, " I have never seen that much VG in any hole ever, so I think it's going to be higher than that, but Sitka is an absolute sleeper."

According to Sitka, management and insiders, including family trusts, own 16.2% of the company. 

38.1% of Sitka is owned by institutions. 

10% is with high net worth individiuals.

The rest is with retail.

The company reports it has a market cap of around CA$83.5 million and 315 million shares outstanding. 

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