Bob Moriarty: This Metals Rally Has More Legs
Bob Moriarty: This Metals Rally Has More Legs from Energy and Gold via 321Gold
Bob Moriarty, founder of 321gold, does not profess to be a market timer but he sure does have a knack for timing. In my last three conversations with him he gave readers prescient insights into gold, the precious metals mining sector, and a stock called Novo Resources, to name a few. Gold has rallied ~$150/oz in the two months since our July conversation and what Bob has to say about gold and the miners here might surprise some people. Without further ado here is Energy & Gold’s September 2017 conversation with Bob Moriarty…
CEO Technician: The last time we spoke was in early August and you had just returned from a trip to visit Novo Resources (TSX-V: NVO, OTC: NSRPF) in Australia. NVO shares were trading at about C$3.25 on the day we spoke and subsequently shot up to nearly C$6 per share within ten days after our conversation. Since then the shares have pulled back by about ⅓ from their peak. What are your thoughts on Novo shares here and the latest news of the C$56 million strategic investment by Kirkland Lake Gold (NYSE:KL, TSX:KL)?
Bob Moriarty: If you buy into Quinton Hennigh’s theory, which I did in 2012, then you naturally believe there is a lot of gold in the Pilbara Basin. Quinton was initially focused on the east side of the Basin, but then when he figured out there was gold in conglomerates at surface on the west end of the Basin he staked about 10,000 square kilometers. If his theory is correct it will be the biggest gold discovery in history.
Kirkland Lake is now the single biggest shareholder of Novo, but Eric Sprott himself owns a bunch of shares too. The interesting thing there is the potential for someone wanting to take over the company. Eric Sprott does not do hostile takeovers. He wants to hire people smarter than he is. Then he lets them do their job. I think that’s the very best thing that happened to Novo. They’ve got another C$70 million in cash, and another C$30 million in warrants potentially from previous warrants. In addition to another C$80 million potential in warrants if the stock traded above C$12. Basically, Novo is fully financed to production. They can explore the crap out of their 10,000 square kilometers. They can either prove the theory or disprove the theory. It’s going to put a basement underneath the stock at about four bucks a share. I don’t see the stock going to C$3.00 again, but somewhere around C$4 should be the lowest it goes to.
CEO Technician: Are you still a big shareholder? Are you still looking for much higher levels?
Bob Moriarty: Absolutely. There’s two issues. One issue is it’s potentially the biggest gold discovery in history. That obviously would move the stock up a lot. The other is what happens if gold goes to $2,000 or $3,000, or whatever ridiculous number you want to come up with. There’s two main things that could move the stock: One is proving Quinton’s theory and the other is if the price of gold moved higher. Novo has been my biggest shareholding since 2012 when I said it had the potential to go up between 10 and 100-fold. It’s already gone up 10-fold and 100-fold is still possible.
CEO Technician: Is Novo drilling right now?