Moriarty On White Gold

gold

I have a lot of time for Bob Moriarty as a gold mining analyst. He separates signal from noise better than any other analyst in the business.

Today he turns his attention to White Gold (V.WGO).

“White Gold serves as the exploration arm of both Kinross and Agnico Eagle. When the proven resource gets big enough and the price of gold high enough we know that one or both of those companies will belly up to the bar and buy WGO.

So you can safely ignore drill results such as 24.38 meters of 23.44 g/t gold at JP Ross, 3.59 g/t Au over 68.0m, 83.13 g/t Au over 2.2m, 30.86 g/t Au over 7m and 24.86 g/t Au over 7m. Knowing that the company reported grab samples of 605 g/t Au, 497 g/t Au and a further 113 g/t Au doesn’t necessarily tell you what you need to know but I can guarantee Kinross and Agnico Eagle realize what those results mean.

I was buying Great Bear Resources at $.50 a share before they started releasing extraordinary results. I knew and I told them they were on to something big. Great Bear is now $5.87 a share and they have a $248 million market cap. White Gold closed at $.77 on Friday and shows a $95 million-market cap. In my view White Gold is the better company but it has a market cap only 40% of what GBR has.

The price is cheap today because (1) investors can’t cope with half a dozen projects being advanced at the same time and (2) a flood of shares being sold to pay for the $.27 warrants. As to (1), ignore it; you don’t have to keep track of a bunch of projects. Let Kinross and Agnico Eagle do your due diligence for you and (2) as the overhang of shares stops since the warrants have expired, expect a pop in the share price.”

Go read the whole thing.

What Bob does not discuss – largely because he wants to keep his message very simple – is that White Gold marries the capital markets skills of David D’Onofrio and his people at PowerOne Capital with the raw exploration talent of the legendary Shawn Ryan and his team at Ground Truth Exploration. A lot of junior exploration companies will have great exploration talent but limited capital markets experience. White Gold was built to be a project driven company and it was built to be able to handle many projects at once. Moriarty is right about the sheer number of projects being a bit incomprehensible to the average investor, but management and the two strategic investors ensure that White Gold can continue to advance on all fronts in the Yukon.

 

Leave a Reply

Your email address will not be published. Required fields are marked *