This fall is going to get exciting. As many others are waking up to the obvious conclusion, the wheels are falling off the world's financial carriage. I see a general stock market high in August/September followed by a giant liquidity event and a big crash in October. Resource shares may be dragged lower but will be the first to recover as investors rush to the only safe haven still left.
There are dozens of inexpensive gold and silver stocks that have been in hibernation for years and are about to wake up. Viva Gold Corp. (VAU:TSX.V; VAUCF:OTCBB) is one.
Viva picked up the 376,000-ounce Tonopah gold project from the bankruptcy court for $25,000. It carried a 7% NSR [net smelter return], which frankly was totally unworkable in any sane financial environment. Management of Viva went to the NSR holders and convinced them to smarten up and got the NSR down to a more realistic 2%.
Viva needed money for drilling so is in the midst of a $1.5 million private placement (pp). Three weeks ago they announced closing on the first $659,500 of the pp, which will allow them to get started on the drill program.
The prior operator of the property was Midway Gold Corp., which went into bankruptcy. Midway was looking for a high-grade small underground mine. Viva has looked over the $20 million worth of prior drilling and has realized Midway couldn't see the forest because of all the trees in the way. With the existing pit-constrained resource, Viva realizes they could have a small, six- to seven-year mine life, but they see much more potential in a larger open-pit heap-leach operation.
Viva sees a 1.5-kilometer (1.5 km) strike length with the existing resource at one end and an already drilled out 30,000 ounces. Over the next six months Viva intends to drill off this trend to determine if the resource is continuous or to find more potential open pits.
Viva has already expanded the M&I [measured and indicated] resource by 36% with only 26 short drill holes. Obviously a renewed interest in gold as a response to the increase in price will help the highly leveraged stocks the most. With Viva you are buying high-quality ounces for about US$15/ounce. That's not going to last long in a gold bull market.
I own shares bought in the open market and I intend to participate in the private placement. Viva Gold is an advertiser and that means I am biased. Do your own due diligence.
Viva Gold Corp
VAU-V $0.31/share (Jul 24, 2019)
VAUCF-OTCBB (Pink) 23 million shares
Viva Gold website
Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
[NLINSERT]Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Viva Gold. My company has a financial relationship with the following companies mentioned in this article: Viva Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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