Silver is cheap right now, says Bob Moriarty of 321 Gold, who profiles a company in the Yukon that he says is delivering world-class exploration results.
In the old west, when the sole lawyer in a small town needed more business, he would bring in another attorney. Two legal beagles in a small town are enough to stir up sufficient business for each.
Actually, mining sort of works the same way. You have to have several mining companies in the same district to beat the drums so investors know there is a story.
investors are a strange breed. After being told for years that we are somehow going to run out of silver any day now by silver PermaBulls, they manage to catch every top in the metal. In April of 2011, they were willing to pay a 25% premium for Eric Sprott’s Silver ETF. They did manage to nail the top once more. But there are actually few real silver companies or districts.
One of the most prolific silver areas in history was the Keno Hill silver district in the Yukon. It’s been around for over 100 years. Over 200 million ounces of silver came out of the region at an average grade of 1374 grams per ton. That’s over 44 ounces a ton or $660 rock.
After shutting down in 1989 due to prevailing low silver prices, the district began to reawaken in 2006 when Alexco Resource purchased the United Keno Hill Mines properties. Alexco Resource Corp. (TO:) is moving toward production with about 80 million ounces of silver in a 43-101. But Keno Hill has pretty much remained off the minds of investors primarily due to a lack of other competing silver companies.
Greg Johnson, CEO and Chairman of Metallic Minerals Corp (V:), was an important part of NovaGold who helped take the company from $0.09 a share in 2001 to nearly $20 a share a few years later. NovaGold helped found Alexco and Greg was part of the process. If I was to ask around as to who knows more about Keno Hill than anyone in the world, I think the answer would be Greg Johnson.
Greg Johnson took over a moribund Yukon junior named Monster Mining in 2016, changed the name to Metallic Minerals and hit the ground running. In 2016 he was behind the raise of over $4 million and in January of 2017 doubled the land position of the company within the Keno Hill region.
Within the Metallic Minerals properties, eight of the previously known structural corridors cross the property. Metallic isn’t prospecting for silver, they already know where the shear zones are. They are drilling deeper under known zones of mineralization. When Alexco came into the district, they plucked the low hanging fruit in the west half of the district and that makes a lot of sense. But the eastern half was fragmented private land. While it took a lot more money and work, that is what Greg Johnson has assembled.
This is not an issue of some junior having wild expectations of what they might find after tens of millions of dollars spent on exploration. It’s not going to be a mine; it already was a dozen or so mines at absurdly high grades.
But you can’t buy anything without knowing the name. Metallic is starting promotion but most of all; they are delivering world-class results from an aggressive sampling and drill program. In May of 2017 the company announced a $1.5 million exploration program. In August of 2017 they started drilling. By October assays came back from the surface sampling with silver values up to 988 g/t and gold values of 24 g/t. At the Bounty/Buccaneer property surface samples released in early December showed values as high as 12,078 g/t Ag.
Assays from the 14 holes 1,320-meter drill program are now drifting in. A press release from December 13, 2017 shows the results from the first seven of the holes including one hole with 1.6 meters of 1,405 g/t Ag with 26% lead and 3.7% zinc. That’s the equivalent of 2,851-g/t silver.
I hate buying stuff when it’s expensive. That’s just of true of clothes and cars as of junior mining shares, gold or silver. I wrote a whole best selling book I called Nobody Knows Anything trying to convince people to buy cheap and sell dear. It works for me and I know it will work for you.
Silver was expensive in April of 2011 and I said so. Silver is cheap today and I saw a bottom coming soon and said so. Right now it takes about 79 ounces of silver to buy one ounce of gold. Relative to just about everything, silver is cheap. I just bought some this week at $16.00.
Silver is cheap and the few true silver mining juniors are at giveaway prices. I was a buyer of Metallic Minerals in the open market months ago about 10% cheaper than it is today. I knew once investors saw the bonanza silver grades coming out the company would become one of the leading go-to silver companies.
Metallic Minerals has what any company needs to succeed. They are in a known world-class silver district. They have experienced and seasoned management. They have money in the bank for future work and with any luck will soon have a tailwind in the price of silver. Read their presentation, it’s excellent.
Metallic Minerals is an advertiser. I own shares purchased in the open marker months ago. Naturally I am biased, I have known Greg Johnson for 16 years now. You make the money off your investments when you are wise and you lose the money when you are unwise so please do your own due diligence.