In this month’s conversation with 321gold founder Bob Moriarty we discuss the ESG trend that is sweeping across the mining sector and why Bob believes the climate change issue is vastly overstated. Bob also believes that investor sentiment on the US stock market has reached frothy levels, and the next major move in stocks will be lower. We then delve into three of Bob’s favorite junior miners, and a company that Bob believes has the best gold project in all of Canada. Without further ado, Energy & Gold’s June 2023 conversation with Bob Moriarty…
Goldfinger:
Let’s start this conversation in a different place. I’ve noticed a strong ESG trend sweeping the mining sector, what do you make of this? The mining sector clearly feels that it must improve optics in order to gain a larger investor following.
Bob Moriarty:
What is the important thing that causes climate change?
Goldfinger:
The Sun
Bob Moriarty:
Thank you. The world’s four and a half billion years old. How long has climate change been going on?
Goldfinger:
Since the beginning of the earth?
Bob Moriarty:
Four and a half billion years.
Goldfinger:
Yeah.
Bob Moriarty:
The whole thing is fraud, and we’ve gone from environmental protection, which absolutely makes sense to this fraud of climate change. Okay. CO2, what’s supposed to be the big problem, but actually, we know it’s not a problem. You need CO2 to grow things. Okay. If you reduce CO2 too much, you don’t grow anything. Now, they’re cutting down farming in Canada, and in the Netherlands. And what greenhouse gas are they trying to eliminate?
Goldfinger:
Natural gas?
Bob Moriarty:
No, nitrogen. Now, nitrogen is 78% of what we breathe. Okay, so if nitrogen is a real issue, but we also need to take corks and shove them in the butt of cows to stop what the other greenhouse gas.
Goldfinger:
You’re giving me a quiz on greenhouse gasses. Is it methane?
Bob Moriarty:
Exactly. So they went from CO2 to nitrogen, to methane. It’s all fraud. And it’s part of the World Economic Forum and the Club of Rome.
There’s too many people. We need to get rid of the people. The problem is too many people.
And the thing is, it’s totally insane. Now, if you actually look at it, wind farms and electric vehicles are not particularly green. So we’re going to go to wind farms and solar energy, and electric vehicles to go green, but what do you need for wind farms and green energy? You need lithium, you need copper, you need nickel. So we’re told we need to increase the production of green minerals but you got to have fossil fuels to produce them. What single issue has more to do with the climate than anything else?
Goldfinger:
Sunlight?
Bob Moriarty:
Thank you. And nobody wants to talk about that, but that’s what the issue is.
Goldfinger:
So it’s obvious… You made an interesting point. They want to reduce the population. That’s an interesting concept because… In one sense, I can see more human beings causing more emissions, causing more stress on the planet and natural resources.
Bob Moriarty:
You’re assuming that those are a problem. And the only reason you assume that, okay, it is because you’ve told that.
Goldfinger:
Just think about New York City, 10 million people crammed into something the size of Palm Beach County, Florida. It’s messy, the streets are dirty….
Bob Moriarty:
Wait a minute, that doesn’t have anything to do with New York City. You could say the same thing with Beijing, but Beijing is not dirty. Boston is filthy. New York City is filthy, San Francisco is filthy, Portland is filthy, LA is filthy because of government actions. And the really strange thing is, in this effort to solve a problem that doesn’t exist, we are destroying the quality of life. Now, I used to ask a question, how old are you?
Goldfinger:
43.
Bob Moriarty:
You’re just barely old enough to know this, but are people, by and large, better off today? Do they have more cars, more phones, more TVs, more transportation than they were 50 years ago?
Goldfinger:
People are absolutely better off today than they were 50 years ago in terms of overall quality of life. However, I would say that from a mental health standpoint, I’m not sure people are better off.
Bob Moriarty:
You’re absolutely correct. You’re spot on. However, is that the government bullshit, that we’re being told that’s creating the problem? Okay. Governments want everybody in a panic, and there’s no particular reason to be panicky. I thought about something that has occurred to me, literally, in years. I was trying to clean this place up, and we’ve got a place that you can donate goods to, and I took a big box, and I filled it with shoes that I don’t wear. Now, how many pairs of shoes do you have?
Goldfinger:
Probably almost 20.
Bob Moriarty:
Okay, I had about 15. And I thought, this is bullshit. So I gave away six or eight pairs, and I’m still thinking about it. I’m thinking, God, do I really need eight or 10 pairs of shoes? When my dad died, and he died in 1962, he had two pairs of shoes. When I grew up in the forties and fifties, and into the mid-sixties, we were always hungry. We weren’t starving, but we were hungry. And that was with six kids, and two parents who worked. Literally, we are so much better off today than we were 50 years ago, and that’s true in most places in the world. Now, before you define a problem, you’ve got to say, “Okay, how do we know? What can we look at that tells us there’s a problem?” I’m going to tell you flat out, this whole climate change thing is bullshit.
It’s propaganda, it’s fear porn, it’s the elites trying to control people. And actually, the standard of living, of… Not standard of living, the wages of most Americans have been going down since 1980, and the split between the rich and the poor is greater than it’s ever been. And that’s really scary. Okay. That’s how the revolution started. And quite bluntly, I think that somebody’s trying to start a revolution, this whole thing with Trump… I don’t like Trump, I think Trump’s a narcissistic buffoon. However, anything that he did with classified documents, Hillary Clinton did, Obama did, and Biden did. So why do we have this two-tier system of justice, where they’re going after Trump? Because he said he wanted to clean up the swamp.
Goldfinger:
Yeah. The Trump topic is a another thing. And I agree. I’m not a fan of Mr. Trump, and he’s definitely an extremely arrogant human being. He brought a lot of this on himself by his own actions, and his own statements. But I agree, it is… It’s not a great thing for the United States to have multiple prosecutions against a living former president. It’s helping to reduce the honor of the office and… I’m not sure what really is to be gained by it.
Bob Moriarty:
Let me give you one better. Based on your knowledge, and your education, and what you see and read, and hear, and your opinion, who’s the bigger criminal? Biden or Trump?
Goldfinger:
It’s a tough one. Flip a coin. It’s a tough one.
Bob Moriarty:
Absolutely. It’s a tough one. Biden got caught taking a $5 million bribe, and Hunter Biden is the dirtiest son of a bitch I’ve ever seen. Somebody went through his laptop and counted, I think, 288 felonies that he committed. And the FBI has been sitting on that laptop for three and a half years and never charged him with a single crime and claimed the laptop was some sort of Russian propaganda.
Goldfinger:
Yeah, I’m not a fan of Biden, and I actually kind of feel sorry for him because he’s going really senile, and I don’t see how he stays in office for another 16 months. But again, that’s another topic. The only thing you need to really know about Trump is, you need to know his past, and who his favored attorney was, in Manhattan, back in the late seventies and early eighties, and that was Roy Cohn.
Bob Moriarty:
Roy Cohn was the dirtiest son of a bitch in the United States.
Goldfinger:
Exactly.
Bob Moriarty:
There’s a good book out, about the FBI and the CIA, and the book goes through hundreds of examples. We are being led by people who are all being blackmailed. Okay. Do you know John Roberts was part of the Epstein crew, and Dershowitz was part of the Epstein crew, and Roy Cohn? All of those people were dirty. Jay Edgar Hoover used to party with the mafia, and he was screaming faggot, he was a cross dresser. Okay. Holy cow. What has the FBI done? Listening to James Comey talk about why they hadn’t stopped Trump. Really. We got to make sure this guy doesn’t take office, because if he takes office, he’s going to politicize the entire process. Gee, would that be like how the DOJ and FBI determined they should be the ones to pick the president?
Goldfinger:
Yeah, and I think that’s the truth of the matter, is that a second Trump term would be so bad for many in the establishment, and frankly, dangerous to the world as a whole, that… I think there was definitely a concerted effort by many to do whatever they can to take him down before he actually has a chance to win in 2024. And so that’s what is going on here, pretty clearly, but that doesn’t negate the fact that he may have committed crimes.
Bob Moriarty:
I worked in New York City for Ross Perot, and I worked for Marx’s Toys, and we were going to move our entire office up to Stanford, Connecticut, because taxes were so crazy in New York City in 1974. The moving vans turned up on a Saturday morning, and somebody, literally, from the mob, came to the guy in charge of the move and said, “Okay, I want $50,000 cash today.” The guy said, “Well, it’s Saturday, and the banks are closed.” And the guy said, “I don’t give a shit. That’s your problem. Okay. You can have these vans sit here for the next month if you want to. I want 50 grand.” What do you think the guy doing the move did?
Goldfinger:
I don’t know.
Bob Moriarty:
He went to his vehicle, he opened his briefcase, counted out $50,000, and he gave it to him. If you’re in New York City, and you’re in the Real Estate business, you are committing crimes. Period. Some of the things, and the people… Donald Trump believes in the borders. Yeah, I’ll agree there. I agree with his stance rather than Biden’s stance, but Trump’s story always was, his dad gave him a building, and he built his fortune. It’s bullshit. Donald Trump was a multimillionaire when he was nine years old, because his dad moved a lot of assets into Donald Trump. If you’re in New York City… Actually, it’s probably true of New York, Chicago, Boston, San Francisco. If you’re in the Real Estate business, you’re committing crimes and in bed with the local mob. Period.
Goldfinger:
Let’s shift to the market. This is an interesting time for a number of reasons. It’s both interesting and boring at the same time. And i’ll explain what I mean by that. Because it seemed like things were really getting hectic and volatile back in March, with the bank failures, and the Fed having to step in there with a new lending program. And every time the Fed has stepped in with some extraordinary measure in the last, what, decade or so, it has, basically, stabilized markets. Maybe not instantly, but within a month or two, it has managed to stabilize markets.
This time is no different, and we’re seeing a stair step higher. Most people have been pretty negative on the market the past couple months, but now, suddenly, with stocks making 52-week highs, people are getting bullish again. And Barron’s is out with a cover story saying, “Stick with the bull. The bull is back.” You’re a student of sentiment. I can look at sentiment right now, and say, “Well, it’s bullish again. People are bulled up.” I see the daily sentiment index, the VIX, sentiment on the VIX, is that a nine? What do you make of this?
SPY (Daily)
Bob Moriarty:
We’re going to know when to sell gold when Barron’s puts Bill Murphy on the cover. Take a look at the latest DSI numbers (Nasdaq above 90). Now, regardless of your opinion of DSI, I think you realize it’s valid. If you look at those numbers, those numbers are from yesterday, what’s the next major move?
Goldfinger:
The next major move is most likely down in stocks.
Bob Moriarty:
Exactly. And for Barron’s, and Wall Street Journal, let all these guys leap on the train. When the DSI for the S&P is 91 and the NASDAQ is 93, it’s not a good time to jump on that train. And when the VIX is nine, the next move is a lot more volatility, with 88 and 91. And the Nikkei, it was 88. And the Nikkei was actually higher a few days ago. Let me see if I… See what it was a few days ago. Yeah, it was 93 on Tuesday. Okay. No, it’s 90. Let’s see what it says.
Goldfinger:
It was 93 on Tuesday.
Bob Moriarty:
Yes. I believe that, in hindsight, we’ll look at all its bullishness, and all these new highs as a dead cat bounce. My opinion is just an opinion, and you’re actually better at this than I am. My opinion is, the next major move will be down.
And we’ve got some stuff. I’ll give you one better we should at least mention. There is a non-zero chance of World War III beginning and ending next week.
Goldfinger:
That seems like a very bold and extreme prognostication.
Bob Moriarty:
Actually, it’s not extreme. I said, non-zero. I didn’t say 90%, I didn’t say 50%-
Goldfinger:
0.01%?
Bob Moriarty:
It could be 1%. But here’s the situation. The Ukrainians have started their counterattack, the Russians are kicking the shit out of them. The 101st Airborne is in Romania, the 82nd Airborne is in Poland. And on Monday the 12th of June, the biggest war games in European history are due to start and end on the 23rd. The Ukrainians blew up the dam. We know this because they increased the level of the water upstream prior to the dam collapsing. Frankly, there’s zero reasons why the Russians would destroy their own dam. So the Ukrainians have bet the farm on the counter offensive, the Russian weapons are far more effective. The Ukrainians are getting slaughtered, and Biden has credible evidence of having taken a $5 million dive where the guy offering him the bribe recorded the call. This is right out of Wagging the Dog.
Goldfinger:
It’s interesting because this is a very polarizing topic. I can go on Twitter, and I can… Or ceo.ca, or whatever chat board, and I see people that are strongly pro-Ukrainian, or anti-Russian, some people are very pro-Putin, pro-Russian. Usually, the farther right in the spectrum one is, the more one sides with Russia in this conflict. To say that the Russian weaponry is superior, it’s mind-boggling to me. It’s mind-boggling. All the evidence points to the contrary.
Bob Moriarty:
I was doing exactly the same thing the Russians are doing in my twenty months in Vietnam. They’re doing it with $1,000 drones, and I was doing it in the Bird Dog that took more losses in Vietnam than any other aircraft. I controlled hundreds of airstrikes, I controlled hundreds of artillery missions. I am the most qualified guy you could possibly talk to about weapon systems, and the Russian weapon system scares the shit out of me. The German Leopard tanks, which are supposed to be among the best tanks in the world, they’ve sent 16 of them over, and I think 12 of them have been destroyed in the last two or three days. This war is so lopsided, it is absolutely criminal that it continues to go on.
And I blame Boris Johnson, and I blame Zelensky, and I feel terrible for the Ukrainian young men and middle-aged men. They’re being tossed into a slaughter. The Russians have torpedoes that can carry a hundred megaton nuclear weapon, and could wipe out the entire east coast. We got 13 aircraft carriers, and those aircraft carriers wouldn’t last the first 30 minutes of a real war with Russia or China. We have been through the most dangerous period in history. And the strange thing is, it doesn’t even have to go nuclear. Their weapons are so much better than anything that we’ve got. If NATO decides they’re going to go all the way out in Ukraine, and that could happen this week, they could decide, well, we’re going to pretend they’re war games, and we’re going to go right up to the border, and we’re going to continue, we’re going to wipe out those nasty Russians, we are going to see the beginning of World War III. And two or three days later, we’re going to see the end, because the Russians are going to slaughter the EU. The EU’s out of weapons now, because they’ve sent them all to Ukraine.
Goldfinger:
It’s really hard for me to fathom that just based upon the results we’ve seen, and the fact that the Russian fighter jets are being shot down by shoulder-fired stuff that’s 30 or 40 years old. It doesn’t seem like they’re so state-of-the-art. Now, I get that this is a drone war, and drones are reshaping the battlefield, it’s almost like… It doesn’t matter whether it’s Abrams, or Leopard or Russian, T90, or whatever, tanks are almost an archaic way of fighting a war, because they’re too slow, and they make easy targets. They’re only good against infantry. But when you have fighter jets, and you have advanced drones that carry large warheads, tanks are archaic. I think future wars are going to be fought, almost purely, in the air.
Let’s talk about gold, the gold price is $1975. If we think back, the last 30 years, $1975 is a pretty high gold price, relative to where we’ve been. In fact, it’s almost an all time high.
Gold (Daily – 1 Year)
Bob Moriarty:
Right.
Goldfinger:
It’s within 5% of an all time high. Yet, I see a lot of people complaining, a lot of gold investors saying they’re sick of investing in this useless thing that doesn’t go up. And when we talk about gold mining stocks, the sentiment is even worse. It’s absolutely… It’s horrendous. It’s so bad right now.
Bob Moriarty:
No, it’s wonderful. It’s so bad. When you compare gold stocks to the S&P, or when you compare gold stocks to the price of gold, or when you compare gold stocks to commodities, gold’s at the lowest it’s ever been. Okay. And that’s a great time to invest, of course. If you put all your money into Novo, or into Irving, or into the stocks that have done nothing but go down, you’re saying, “God, I just hate this,” but the time to get into a market is when everybody hates it. And the time to get out of a market is when everybody loves it. And I think, the last time we talked, I said that I was inclined to believe that we’re near the top. Absolutely, now. The S&P and the NASDAQ could top in a week. Those DSI numbers are high. The Nikkei, at 93, 95, or 96 would be a historical record. So we are really, really high, and the next move is down for the DOW and up for gold shares.
Goldfinger:
Yeah. Just turning back to gold itself, it seems to me that this consolidation here, around… Basically, around $2,000 an ounce is incredibly bullish, because not only is it a high price, but… You’re not seeing gold in any headlines, you’re not seeing gold on the cover of Barron’s, you’re not seeing them talk about it on financial news channels, you’re not seeing big money managers say, “You have to own gold.” In fact, quite the opposite, I think a lot of people don’t want to own gold here. Yet, somebody’s buying. And when we think about where the world is heading, and the reshaping of the global financial system, I think gold has a key role, as an underpinning, to the reshaping of the global financial system. I can’t time when the gold price moves perfectly for sure, and I have no idea how high it could go, when it’s going to go there, but it seems to me, at some point in the next five years, there’s a pretty good chance that we see the number 3 in front of the gold price.
Bob Moriarty:
No.
Goldfinger:
No to what?
Bob Moriarty:
I’m going to send you something. My wife died three years ago. And because she died, I get to spend a boatload of time on the internet. I listen to the people who have a real track record. I’m going to send you a link to a hedge fund that’s the best, talking about commodities that I’ve ever seen. And he says, “Gold is going to $10,000.”
Goldfinger:
When? “When?” Is the key question.
Bob Moriarty:
Actually, Friday. If I write about the non-zero, it’s Friday.
Goldfinger:
I don’t want to see gold at $10,000 in a world where there’s World War III. I’d rather have it go to a lower price and not have World War III.
Bob Moriarty:
The really scary thing is, I am absolutely convinced. And you’ve heard many of my interviews. So we’ve been talking for years. We’re in the depression that I have been predicting for years. We’re in it. It’s not at the very beginning, we’re in the damn thing. And the commercial real estate is fucked, residential real estate is fucked. The IMF says it’s going to take 5.25% to 5.5% interest rates, at least, through 2024. And of course, the higher the interest rates, the more hedge funds, insurance companies, and banks are screwed. We went out and started giving money away at 0% interest, people did a lot of dumb shit stuff.
And the piper is at the door, and the piper wants to get paid. It is going to get bad. The smartest people I know, say, “We’re fucked.” And we’re not only fucked worse than 2008, we’re fucked worse than 1929. This is the biggest shift in world economies, in world history. The debt-based system is burning down now. We are led by idiots…. Regardless of how you feel about Biden or Trump, or Democrats, or Republicans, they’re all idiots. They’re all idiots. Okay. It’s amazing to me. Zelensky says… The Pope goes to him and says, “Why don’t we negotiate an end to the war?” Zelensky says, “Hell no. I don’t want to negotiate.” They are going to take him out of office in a box.
Goldfinger:
So before we finish up, I want to talk about a couple of junior miners, and discussing the importance of having a selling discipline. In our last conversation you said that Lion One (TSX-V:LIO, OTC:LOMLF) is your largest position, as you alluded to, “It’s gone down with a lot of other juniors in the last few months.” What’s going on here?
LIO.V (Daily)
Bob Moriarty:
That’s a really good question. There’s actually a very simple answer. There was a hedge fund that had 11 or 12 million shares, and they’ve been dumping it for, at least, the last six months. And I think they’ve sold all their shares now. Of course, in my investment books, I’d say, buy when things are cheap, and sell when they’re expensive. And that sounds simplistic. It’s fact of the matter, it makes a ton of sense. You just made my point. I’m thinking, real seriously, about buying more. And the crazy thing is, I’ve got a lot of shares now.
Goldfinger:
Yeah. I have people asking me about Lion One. I’m not a shareholder, but obviously, we’ve talked about it multiple times, and I know it’s covered by Eric Coffin as well. A lot of smart guys own this one. Just looking at the chart, it looks like a lot of other charts out there are not particularly good. And it makes one wonder, “What the hell is going on?” Gold is 1975. These guys are building a mine, a high grade mine, in a good place to build a gold mine, where there’s other permitted operations. It’s puzzling. It’s really puzzling.
Bob Moriarty:
Actually, it’s not… Because as soon as you consider the fact that somebody has unloaded 11 or 12 million shares, then you realize why it’s gone down. Now, there were a ton of other stocks that have gone down, that you can’t quite figure that out. And in my books, I pointed out that when liquidity is really bad, that’s a great time to buy stocks. Liquidity means you can unload any position, or buy any position, that’s a mark at the top. And when liquidity is terrible, and there’s 50 shares a day trading, that’s a sign of a bottom. Now, I’m trying to find a news release, and I want to show you. Okay. I’m going to send you a news release that absolutely shows, exactly, the problem. Do you understand what flash gold is?
Goldfinger:
Flash gold?
Bob Moriarty:
Yeah.
Goldfinger:
No.
Bob Moriarty:
Now, bear with me just a second, and I need to find another press release that I just found. Lion One published a news release on April 25th, and there’s some pictures of little tiny veins in the core. And the key to it is, believe it or not, those little tiny veins, if you assayed one inch of the vein, it would be in percent of gold. These tiny veins are incredibly rich, and that’s important to understand because of the next thing that I’m going to show you. Luckily, I’ve been to so many projects, so I can understand this. Why do you not drill down the vein?
Goldfinger:
Because it’s not representative.
Bob Moriarty:
Exactly. What you’re trying to do is, you’re not trying to come up with the biggest numbers, you’re trying to come up with the numbers that represent the average grade of the material. And that’s where it gets really interesting. Look at my hands. If you can imagine two veins like this, these little tiny veins that are maybe half an inch, which direction do you drill, that gives you representative of the actual goals in the system? And the answer is, neither. Okay. Because you can either get this one, or you can get this one, but you can’t get both of them. In the press release, the last press release that I just sent you, in figure three, it shows fracture orientation versus orientation of grade-control. And here’s the key. When is Lion One going to start mining?
Goldfinger:
I think in about a year or so?
Bob Moriarty:
They’re mining right now. And guys are writing me, saying, “Hey, wait a minute, I’m not seeing any numbers of Lion One, but they’ve been mining for months.” There is a difference between mining and processing. And they are actually mining, and they’re storing material. And you’re going to have to accept this as an opinion. But they believe that because of the orientation of the fractures, that no matter how they drill it, they’re going to underestimate the gold. So if they understate gold in the drilling, what’s going to happen when they actually process?
Goldfinger:
They’re going to see upside in the grade.
Bob Moriarty:
They’re going to see incredible upside, like two or three times the upside. So if you look at that last press release in figure three, you’ll see exactly what I’m talking about, because there’s A, B, C, and D, and each of those blocks has a different orientation, and there is no drilling. There’s no orientation of the drilling that you could actually touch all four blocks. So regardless of what they report, the actual mining grade is going to be higher. And that’s really important. So Lion One has the only alkaline deposit in the world, in a junior. They own 100% of it, and they’re in an extremely mining friendly country.
Goldfinger:
And then, another… One of the bright spots that’s still left, I guess, in the junior mining sector in 2023, aside from buying at low share prices, it’s companies that drill and make a new discovery, or companies that get a lot of attention because of the quality of a project and how promising it looks.
One company that comes to mind is Cartier Silver (CSE:CFE, OTC:CRTIF). Cartier Silver released a detailed piece of news last week. Cartier has projects in Bolivia and these are some of the same guys that are involved with Eloro, including the CEO, Tom Larsen, and the VP of Exploration, Dr. Bill Pearson. Cartier outlined an 800 meter by 500 meter target on their property. This is pretty interesting. Lot of things are lining up here, including surface outcrops, chargeability anomalies that get stronger at depth, and the fact there’s been some artisanal mining near surface. The best place to find a mine is near a mine. So a lot is lining up here. And this news release says that the drilling will commence shortly. What are your thoughts on Cartier?
Bob Moriarty:
First of all, Cartier owns 2.21 million shares of Eloro. Okay. So they’ve got about 7 or $8 million value in the shares they own. And even with the results from last week, it’s only got a $17 million market cap. Lion One is my biggest position, but I got a giant position in Cartier. And in my opinion, Cartier is going to do exactly the same thing that Eloro did three years ago. And I think it went from 17 cents… Let me figure it out. Okay. Eloro went from 15 cents in February, March 2020, to $5.89 in one year. It went up almost 40 fold. And the only other stock that I can think of, that has had that kind of return lately, would be Great Bear. Great Bear went from $.25 to $29.00!
Goldfinger:
Yeah, with Cartier, you have 38 million shares out, and a big chunk of those shares are held by people that won’t be selling anytime soon. So you have a pretty tight trading float, so obviously, some anticipation of the results, and then certainly, some joy with the drill results. And this could be over a dollar. It wouldn’t be that hard to go over a dollar. Obviously, if they hit a new discovery, then, yeah, it could absolutely do an Eloro. $5 a share would be about a $200 million market cap in Canada, definitely not impossible for a new discovery play. It obviously depends upon how good the discovery is. But yeah, this is in an area of the country, where some of the highest silver grades in the history of the world have been pulled out of the ground, here, historically. And they are exploring for silver, lead, and zinc, the metals this region of Bolivia are well known for.
Bob Moriarty:
Let me read something to you, they viewed magnetic and IP survey data. So they’ve got a target that’s 800 meters by 500 meters, but it only goes down to 400 meters. Now, did you realize why it only goes down to 400 meters?
Goldfinger:
I guess that’s all that the survey could reach.
Bob Moriarty:
Exactly right. So if you take 800 meters by 500 meters, by 400 meters, and you figured 2.65 for specific gravity, that’s 416 million tons of rock. So it’s going to be very interesting. And I will say, the initial drill results will not necessarily reflect the average grade of the 416 million tons, because they’re going to drill, where there is actual production going on now. And it’s at the intersection of two faults. So if they came out, and they showed $300 rock, you’re not going to see $300 rock across 416 million tons. You could see $80 rock, you can see $100 rock. It appears that Eloro is going to have something like $110 or $120 rock at Iska Iska. Their MRE is actually late. It was due two months ago. And I think investors anticipate good numbers. And that would be 600 million tons, 700 million tons. Then you start talking about $70 billion worth of rock.
Goldfinger:
Yeah, I’m definitely looking forward to the Eloro resource estimate. It is taking a while, because I know that the metallurgy is not simple, and the recoveries of the different metals, obviously, matters a great deal to the economics of the deposit.
Bob Moriarty:
Here’s the issue. The guy who’s doing the tin portion of the Eloro resource is nit picking. And even though he knew there was a ticking clock, he totally ignored it. And it’s really hard to say, “Are they going to have 30% recoveries for tin? Are they going to have 70% recoveries for tin?” If you look at gold, silver heap leach, he believes, a lot of times, that 60% or 70% recovery from gold is good, and maybe 50% silver. Tin is an important part of the Eloro story, but it’s a meaningless part of the Cartier Silver. Now, I was actually buying Cartier at 43 cents on Wednesday, and I’ve got multiple million shares.
Goldfinger:
I bought Cartier shares at $.46 recently.
Cartier Silver (Daily)
Bob Moriarty:
That’s probably why I didn’t get my order filled at $.43. I got an order for another 100,000 shares at .43.
Goldfinger:
Final topic, a lot of junior mining investors don’t seem to be good at selling… The trouble is not the buying, the trouble is the selling.
Bob Moriarty:
Yes.
Goldfinger:
And the selling is tricky, both, on the upside and the downside. A lot of people have trouble taking profits after a big rise. And then, on the flip side of that, a lot of people have trouble just getting out and dumping a stock that’s losing them money, and that they’re down big on.
For example, something like a Novo? I would say, Novo is not a failure, in the big picture of the junior mining sector. This was a company that went from something like a 10 million market cap, to at one point, it was over a billion dollar valuation, it gave people plenty of opportunity to make windfall gains when Kirkland Lake and Eric Sprott made the big investments in the company. What happened since then is, obviously, multifaceted, and there were plenty of warning signs in the last five years that all was not going well. People had plenty of opportunities to get out, but I’m afraid some people probably did the full round trip, 25 cents to $8, back to 25 cents. Do you have any words of wisdom in terms of selling junior mining stocks?
Bob Moriarty:
Yes. One word. Silverado.
Goldfinger:
What’s Silverado?
Bob Moriarty:
It’s a mining company. I wrote it up about 20 years ago. And I think the stock was 12 cents a share. And the stock went up to 75 cents a share. And I got a call from a guy who said, “Hey, I follow your website, and I’d love your advice. And I bought a bunch of Silverado at 12 cents on your advice. It’s 75 now. What should I do?” And I said, “Why’d you buy it? What’s your purpose?” And he said, “Well, I want to make money.” And I said, “Okay. So you have a stock that you bought it at 12 cents, and it’s up 550%. Why don’t you sell?” “But it could go higher.” Hell yes, it could go higher. Of course, it could go higher. Now, Silverado actually went to 78 cents within a few days of this phone call. And I thought, now, it’s going to go down. And it did go down. I did my good deed to get a merit badge, and told that guy to sell at 550% profit. A couple of years later, I got a phone call, and I thought I recognized the voice.
And I said, “Wait a minute, you’re a farmer from Iowa.” And he said, “Yeah, you have a good memory.” I said, “You called me up about Silverado. Didn’t you buy it at 10 or 12 cents?” He said, “Well, yeah. Actually, I did.” And I said, “It was 75 cents, and I told you that you should probably sell if you wanted to make a profit. What did you do?” And it was a long, pregnant silence. Sometimes, long, pregnant silences tell you more than what you’ve actually been told. And he said, “Well, I’ve sold it.” And I said, “Well, okay, I may have worded that incorrectly, I suggested you sell it for 75 cents. What price did you sell?” And he said, “7.” I said, “Wait a minute, you bought that stock at 10 or 12 cents, you rode it to 75 cents, you asked if you should sell, you were told to sell, and you rode it all the way back down.” Most people… And I hate to talk about my own books, because I don’t actually make any money from those books at all, but most people need to learn how to sell.
And I talk about that in Basic Investing In Resource Stocks, and 100% of the reason small investors lose money in the mining stocks is because of their behavior. If they would be satisfied with it, whether 25%, or 50%, or 100% returns every year, they could have it, if they would buy when stocks are cheap, and sell when they’re expensive. Now, I’m not going to sell CFE at 45 cents, and I’m not going to sell it at 90 cents, because I think there’s a real chance of it doing as well as Eloro, a 10 or 20, or 30 bagger. And if you have one of those every 10 years, you’ll retire rich. It has the same potential that Eloro had. Bill Pearson’s a good guy, I’ve known him for 20 years, Tom Larsen is a personal friend. And I think both CFE and Eloro were going to do very well, but you’ve got to take a profit when you can. If you won’t sell at a profit, the only other alternative is, you sell at a loss.
Goldfinger:
Those are great comments. And what comes to mind is that most retail investors are in the market for greed, and they give into fear. And instead of having an actual plan, and a real reason why they bought, and a real reason to sell, they’re operating on emotions. When a stock goes from 12 cents to 75 cents, I guarantee you, you go on the chat boards, Stockhouse or ceo.ca, or Twitter, or wherever, and you’re going to see a lot of bullish comments. You’re going to see a lot of optimism that… It went from 12 cents to 75 cents because they’ve got this great discovery, and the discovery’s going to get better, and it’s going to get better and better. Just like we saw in Novo, at $7 or $8 a share there was a lot of optimism. This is the biggest thing ever, greatest thing since sliced bread. And the reality is, the truth is usually somewhere in the middle. It’s usually not as great as it seems, at the very high share price valuations. And it’s usually not as bad as it seems, sort of like Novo right now at $.20.
NVO.TO (Daily)
Bob Moriarty:
Yeah, that’s a really good point.
What is the best story in Canada today? I’m not talking about stock appreciation, I’m talking about which gold project, in Canada, is the best project. And I’ll give you a hint, it’s been around for three years. What is a company that is absolutely going to go into production?
Goldfinger:
That would probably be Snowline, Banyan, or….
Bob Moriarty:
Nope, it’s better than Snowline. Let me give you a hint: It could be 50 million ounces.
Goldfinger:
New Found Gold.
Bob Moriarty:
New Found Gold (TSX:NFG, OTC;NFGFF), yes. New Found Gold shot from $1.50 to $13.50 in one year. And then, in the next year, it was down by 66%. And the absolutely bad thing is, because there’s no MRE, nobody has any ability to guess how big it is, but they just keep coming out with these barn-burning results, and the stock’s down two thirds from what it was two years ago. And even this year, in March, it was $4.50, and a month later, it was $7.50. If you invest to make money, you have to learn how to take a profit.
Goldfinger:
You have to learn how to take profits, especially in junior mining. Bob, thanks a lot. This has been a great conversation. Enjoy the long weekend!
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Disclosure: Author owns shares of Cartier Silver and Eloro Resources at the time of publishing and may choose to buy or sell at any time without notice.
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