Bob Moriarty: We Are Entering A Gold Bull Market, The Likes Of Which Nobody Has Seen In Their Lifetime
It’s been an exciting last few weeks in the gold mining sector with lots of M&A activity and a steady increase in most share prices across the sector. Meanwhile, the gold price has remained relatively stable. In Energy & Gold’s December conversation with 321gold founder Bob Moriarty we cast a wide net across the junior gold sector and discuss nearly a dozen companies. Bob also explains why we are entering a gold bull market, the likes of which nobody has seen in their lifetime…
Goldfinger: So since we last spoke, you told me about the trip to Novo in Australia, the stock is up really impressively since then (~50%). And I know it’s based upon some news about ore sorting. Can you tell us a little about why that news was so important, and what you see for Novo over the coming months?
Bob Moriarty: Yeah, that’s a really good question. Novo is made up of three uniquely different projects. They’ve got a fairly conventional hard rock project at Beaton Creek with just short of a million ounces of gold at a good grade. They these very nuggety gold hard rock at Karratha that’s impossible to measure and then they’ve got the near surface nuggety gold in alluvials at Egina. If there was water at Egina the alluvials would have been mined out a hundred years ago. But Egina is either under water for a short period during the monsoon season or boiling hot and dry. So you’ve got to mine it with some sort of dry technique.
I went down there a couple of months ago with Keith Barron of Aurania and Erik Wetterling of the Hedgeless Horseman. They had seen Karratha but Egina and Beatons Creek were new to them. In Perth we went with Rob Humphryson to see a sorting machine being used and they are nothing short of remarkable. They were developed for the trash industry. You can separate plastics, glass and metals. They were able to pick up pin head size gold. Actually the most expensive part of the machine is the air compressor and air supply.The operating cost of the machines is less than $.50 per cubic meter sorted. So it’s going to be earth shaking. The big question has to be how much of the 2000 square kilometers is mineralized in an economical basis and the answer appears to be a lot. It will take a lot more testing but I think it might be possible to process 0.15 g/m gold at a profit.
Goldfinger: Okay, so that’s really big news about Novo. And if for those of us who have been following that company since 2017. I know you’ve been following it since its inception in 2009 but, even since 2017, we know that the C$4 per share price level is significant because that’s the level at which Kirkland Lake did the big $50+ million dollar financing with Novo at.
So that’s a psychological level for the stock. So it actually makes perfect sense that it rallied up to about $3.90 and then it pulled back a bit. Obviously it’s going to take some more news, some more good news, or some gold sector rally to get Novo above that $4 level.
Bob Moriarty: Yes, and to be fair and to be totally honest, there’s almost 200 million shares outstanding. So at C$4 per share, you’ve got somewhere between C$700 and C$800 million market cap, and that’s pretty rich for a company that’s not producing gold.
I think the next major milestone will be in April or May. I believe they will be producing at Egina even on a trial basis. That’s going to make them able to move forward. But, all of the progress, however has been very positive, about 15% of the gold is in small gold and should be recovered easily with either the Steinhart or the Tomra machine or a combination of both. And that small gold can be recovered without using water, which appears to be possible it will pay for all of the process it costs. There’s a lot of good news, there’s been good news for 10 years, I am saying the word about what I’ve said, I’ve followed this Novo since 2009 and it’s all true. They’ve got a giant gold deposit.
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Goldfinger: Yeah, I mean, if that is true and they are able to process this, this way, and they are able to get the permits and all of that. Then this is a unique gold project. I mean, it’s really one of a kind. And I think that’s why the story has been so controversial and also so hard for people to wrap their arms around, because there’s really nothing comparable to it.
Bob Moriarty: Well, here’s what’s crazy, it’s really three different one of a kind projects, okay. Now I said from the get go that you cannot measure nuggety gold and everybody came out and said you have to measure it. But you can’t measure it, you can only mine it. And they said, well you’ve got to do this and you got to do that and you got to do this. And I said, look, the Spanish didn’t have to do it and the Romans didn’t have to do that. If you can find it, just mine it. It is a unique project but the gold is there and mining nuggety gold is no different than mining dissemminated gold. If the grade is there, mine it.