We are in a correction for gold, silver and the resource stocks.
Thanks to the overreaction of the Federal Reserve and central banks throughout the world in response to a virus that looks less real as each day passes, fiat currencies are headed for the trash heap. The chance of the price of resources going up is as close to a lead pipe guarantee as at any time in world history. The U.S. government doesn't care how much money it hands out, this is the last raid on the treasury before the country goes bankrupt.
The world has entered the greatest depression in history.
Covid didn't cause it. $250 trillion in debt that can mathematically never be repaid caused it.
Over the past six months 53 million Americans signed up for unemployment. The U.S. government hurled money at them for not working. What a great idea, why didn't I think of that?
It's probably worth pondering what happens when the government runs out of trees to print more paper or stumbles into a shortage of ink. Many, perhaps even most, of those in the ranks of the newly unemployed will never get their prior job back. The depression is hurting both those making minimum wage flipping hamburgers and tens of thousands of highly paid airline staff now without a future. The riots will not just continue, they will get a whole lot worse.
You can still buy an insurance policy on an edifice clearly burning out of control. Those familiar with either of my two financial books, Nobody Knows Anything and Basic Investing in Resource Stocks, realize that I have been predicting this chaos for years and suggesting how to protect yourself. In reality you can buy about any resource company and have a high probability of making money but these are a few of my favorite stocks that I own and treasure as an insurance against certain chaos. They are in no particular order.
Irving Resources Inc. (IRV:CSE; IRVRF:OTCBB), headed by the charming and talented Akiko Levinson, has over half a dozen high grade gold and silver deposits covering past producing mines going back as long as 400 years ago. During WW II Japan closed down all precious metals mining to meet the needs of wartime production. Japan has a long history of gold and silver production. It was only a few years back that the country reopened its borders to non-Japanese resource companies.
Irving's primary focus today is on the Omu property located on the island of Hokkaido in the far north of Japan. Drilling began in 2019 and has produced some extraordinary grades and thickness of mineralization in results released so far. Newmont Goldcorp joined as a Strategic Investor in April of 2019 investing $6 million into Irving. In early 2020 Newmont put in an additional $4 million.
In comparison to operations in Nevada or Canada or Australia, progress is slow in drilling and exploration. Japan has literally had to reinvent the wheel since no one in the resource ministry was even alive when Japan was a major gold producer. They are taking baby steps because they have to. In addition the Covid virus has pretty much crippled transportation as the nation has slowed to a crawl. Mining is reemerging but done in a way satisfactory to the Japanese government.
In June of 2020 Irving made an incredible coup by announcing a non-binding term sheet to come to an agreement on the acquisition of the famous
I love Irving. I love the management; Akiko is one of my favorite people in mining. Quinton Hennigh is a director and helps with technical issues. They have probably the strongest technical teams in Japan and are backed by Newmont and Sumitomo with money and resources. The share structure is tight and as the Covid nonsense goes away progress will be faster. Irving is currently my largest holding.
Aurania Resources Ltd. (ARU:TSX.V; AUIAF:OTCQB) is run by the incredible Keith Barron, famous for the discovery of the 10 million ounce Fruta del Norte gold project in Ecuador, the largest in the country. Even before he made that discovery, Keith was following up on the history of the two Lost Cities of Gold in Ecuador.
Keith came to visit my wife and I over fifteen years ago and entertained us with the tale of these two former Spanish gold mines from the 16th century that had been lost over time. Had it been anyone else, I would have been asking to see the treasure map with the X on it showing the gold. It sounded a lot like looking for gold at the end of a rainbow. But he insisted it was real and he kept searching.
Governments in South American get stupid on a regular basis and all mining exploration shut down in Ecuador for about eight years. Eventually those running the country finally realized that having foreign companies spending money in Ecuador was actually good for the economy. Mining exploration was restarted in 2016. Dr. Barron promptly filed for a lot of land to follow his dream.
Aurania has found a number of interesting hints of links to the Spanish period of mining. In May of this year interpretation of a LiDAR survey revealed what appears to be an ancient Spanish trail. That was on top of another find reported in November of 2019 where company geologists discovered what appears to be vestiges of an old Spanish road. The company believes the road was built for mule trains to take the gold and silver to another mining center.
Keith being Keith, when the team of expert geologists led by Dr. Richard Spencer stumbled across signs of a Kupferschiefer style silver rich copper deposit in southern Ecuador, the company promptly filed a series of new claims over the sedimentary copper mineralization going all the way into northern Peru.
Aurania has an excellent technical team and is in a target rich environment. The company is well cashed up and has a low 41 million shares outstanding. When they start drilling again and releasing results, look for fireworks in the stock.
StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) has a portfolio of 22 different mineral properties located in the Yukon and in British Columbia. With demand for quality projects skyrocketing, StrikePoint will be doing a lot of deals in the near future.
Currently StrikePoint has begun a 2,000-meter drill program at their high-grade Willoughby gold project near Stewart in BC's Golden Triangle. An initial drill program in 2019 generated a high-grade hit of 26 g/t gold over 4 meters. Naturally the company would like to add to that mineralization.
Magna Gold Corp. (MGR:TSX.V; MGLQF:OTCQB) is lead by Arturo Bonillas who was the former president of Timmins Gold now Alio Gold. Timmins restarted the San Antonio Gold Mine in Sonora north of Hermosillo but spent too much money on regional exploration and needed to sell the project after being sued by their local contractor.
Arturo did a deal with Alio Gold where Magna would pay Alio 9.74 million shares and US$5 million or a 1% NSR on or before May 6, 2021, for a 100% interest in the San Francisco mine. In addition Magna came to an agreement with Peal Mexico Sa to settle past due bills for 11 million shares of Magna.
Arturo ran the mine and put it back into production ten years ago. His team will have it back in production this month. The company anticipates production of about 70,000 ounces in the next year and striving for 100,000 ounces a year from now. They have a 43-101 M&I resource of 1.48 million ounces of gold and an operational mine and mill.
Arturo has an especially aggressive plan for increasing production up to 200,000 ounces of gold a year with a five million ounce resource by 2023 by picking up highly potential projects in the Sonora area. Three weeks ago he announced an option on 100% of the Los Muertos silver project near the La Colorada gold mine.
Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCBB) owns 100% of one of the most historic silver mines in Canadian history, the Dolly Varden mine with production up until 1959 of about 20 million ounces of silver.
The relationship between silver and gold is a lot like dancing. Sometimes you lead, sometimes you follow. Since mid-March silver has quietly been leading gold as it ran from below US$12 an ounce to just short of $30 for one of the best advances in history. The ratio of the number of ounces of silver it would take to buy one ounce of gold went from 131 to about 70 ounces of silver today.
The Dolly Varden project has 88 square km of barely explored territory with only 3% of the project explored in detail yet it contains four former operating mines. The company reports a 43-101 silver resource of 44 million ounces of high-grade silver.
Dolly Varden is well cashed up with about $10 million in the till and has commenced a 10,000-meter resource expansion drill program. Look for results to start streaming in starting in October. The company is especially well cashed up having just completed a $10 million private placement. If you like silver you have to like Dolly Varden.
Grande Portage Resources Ltd. (GPG:TSX.V; GPTRF:OTCQB; GPB:FSE) currently operates a pair of drill rigs punching holes in the vein structure in the Herbert gold project located 25 km north of Juneau, Alaska. GPG has an existing 43-101 resource of just under 860,000 ounces of gold at grades between 10 g/t and 14 g/t depending on category.
Ten days ago the company announced running into encouraging two unexpected new veins in the area between the Goat and Main Veins that extends 120 meters east of any previous drilling. One intercept tagged 2.58 meters of mostly quartz with arsenopyrite, galena and pyrite with visible gold of at least 6 inches. When exposed at surface the veins measure between 4 and 16 inches with an almost vertical dip. "The vein apparently strengthens with depth."
These are all stocks that I own. All are cashed up and in major drill programs with lots of results coming soon. If any of them made a serious correction from here, I would be happy to add to my positions.
The government of the U.S. has pretty much burned their bridges. We are bankrupt and that will be obvious to everyone soon. At that point you need to own some resources. If not before.
Do your own due diligence. All of these companies happen to be advertisers along with 45 more I haven't written about.
Irving Resources
IRV-C $3.55 (Sept. 4, 2020)
IRVRF OTCBB 57.2 million shares
Irving Resources website
Aurania Resources
ARU-V $4.27 (Sept. 4, 2020)
AUIAF-OTCQB 40.9 million shares
Aurania Resources website
StrikePoint Gold
SKP-V $0.16 (Sept. 4, 2020)
STKXF-OTC 152.4 million shares
Strikepoint Gold website
Magna Gold
MGR-V $1.36 (Sept. 4, 2020)
MGLQF-OTCQB 84.6 million shares
Magna Gold website
Dolly Varden Silver
DV-V $0.96 (Sept. 4, 2020)
DOLLF-OTCBB 121.3 million shares
Dolly Varden website
Grande Portage Resources
GPG-V $0.60 (Sept 4, 2020)
GPTRF-OTCQB 78.7 million shares<
Grande Portage website
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 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.
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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Irving Resources, Grande Portage Resources, Dolly Varden Silver, Magna Gold, StrikePoint Gold and Aurania Resources. Irving Resources, Grande Portage Resources, Dolly Varden Silver, Magna Gold, StrikePoint Gold and Aurania Resources are advertisers on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: Irving Resources, Grande Portage Resources, Dolly Varden Silver, Magna Gold, StrikePoint Gold and Aurania Resources. Click here for important disclosures about sponsor fees. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of Irving Resources, Grande Portage Resources, Dolly Varden Silver, Magna Gold, StrikePoint Gold and Aurania Resources. Please click here for more information.
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