A Gold Stock That Checks All the Boxes
Contributed Opinion

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Golden Cross Resources Ltd., Snowline Gold Corp., and Silver47 Exploration Corp.
2. Rick Mills: I, or members of my immediate household or family, own securities of: Harvest Gold. My company has a financial relationship with: Harvest Gold and PTX Metals. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Bob Moriarty: I, or members of my immediate household or family, own securities of: Harvest Gold Corp. and Golden Cross Resources. My company has a financial relationship with:  Harvest Gold Corp. and Golden Cross Resources.   I determined which companies would be included in this article based on my research and understanding of the sector.
4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found  below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 
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Ahead of the Herd Disclosures

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Below is an interview by Rick Mills, the editor and publisher of Ahead of the Herd, with Bob Moriarty of 321 Gold.

RM: Let's discuss Golden Cross Resources Ltd. (AUX:TSXV).

BM: When companies advertise with me, I examine their offerings to determine if there's something compelling enough for investor interest.

I spoke with Matthew Roma, the company's CEO, requesting bullet points and non-obvious details. He was an early partner in Snowline Gold Corp. (SGD:TSX.V; SNWGF:OTCQB), which achieved tremendous success over three years, rising from 18 cents to nearly $9.

Another major success was Southern Cross Gold Consolidated Ltd. (SXGC:TSXV; SX2:ASX), and Golden Cross operates within the identical geological structure, but with actually stronger numbers than Southern Cross had. Southern Cross has conducted extensive drilling with 20 rigs currently operating, while Golden Cross is just beginning. Do you understand sheeted vein systems?

RM: Please explain.

BM: You have vein series, and Southern Cross characterized these veins as ladder-like, where you drill down the rungs achieving consecutive high-grade intercepts. Southern Cross had exceptional management who wondered, "Is there gold in the rock between veins?" Previous operators at Reedy Creek, owned by Golden Cross, never tested material between veins.

RM: You're saying the veins are ladder steps and nobody tested between steps?

BM: Exactly.

RM: Fascinating.

BM: It contains 0.3 to 0.5 grams, and with gold currently worth about $110 per gram, 0.3 grams exceeds $30 per tonne — absolutely economic.

Since you must move material anyway, it transforms waste rock into ore. Golden Cross checked so many boxes that despite owning placement shares, I was compelled to purchase additional shares on the open market.

Here's perspective: Golden Cross compared to Southern Cross shows Southern Cross has 33 times higher market value. Compared to Snowline, it has 36 times higher valuation, making it a stock with enormous potential. They're drilling now, expecting assays from former waste rock soon, and just completed a $3,000,000 placement, so they have adequate funding.

RM: Excellent story.

BM: Here's what I appreciate — I've been out of the Canadian junior owning Southern Cross for years, so I have no conflict. I no longer own Snowline, but Snowline and Southern Cross management has been absolutely brilliant, creating phenomenal stories over three years, and Matthew Roma was literally part of both.

RM: We purchase stocks because they're inexpensive. Often we buy purely based on price; if they have great stories, that's bonus, and great results are wonderful, but fundamentally we've discussed buying when market capitalization is ridiculously low. Golden Cross shows market cap just under $33 million - do you still consider that cheap?

BM: Golden Cross has $33 million market cap, but you made an excellent point. Previously, when discussing tactics, I'd say, "Who cares? You have a 2.5-cent stock with $3 million market cap. Where do you expect it to go in a bull market?" Some stocks like Harvest Gold Corp. (HVG:TSX.V) went from 2.5 cents to 9.5 cents.

You profit from percentage increases, not from $0.50 to a dollar movements, but from 2.5 cents to 9.5 cents. With Golden Cross, even at $33 million market cap can seem absurdly cheap because they've checked all technical boxes.

RM: People often ask, "How do you value companies with resources?" When companies have resources, the question becomes: what's that metal worth underground? Twenty-five years ago, I visited my favorite magazine shop — a small place with diverse publications including 'Miner's Digest,' 'Northern Miner,' and 'Investor's Digest.'

'Investor's Digest' contained excellent information. I collected stories, particularly liking two. David Stone wasn't shy about junior resource stock risks and potential returns matching risk levels.

He advocated seeking a minimum five-times return potential. He had calculation methods.

Another author I followed was Julian Baring, a renowned UK institutional investor, who developed in-situ valuations to determine if stocks merited fund investment.

I use both approaches when examining advanced companies with resources.

I calculate the metals' in-situ value. Examining PTX Metals Inc. (PTX:TSXV; PANXF:OTCQB; 9PX:FSE), there's potential $8+ billion metal value underground —  135m/t @0.8%Cu Eq —  so you consider per-share buyout value.

Julian's method took 10% of the in-situ value divided by the fully diluted outstanding shares. The exchange dislikes this math, but it's my personal approach.

With $8 billion, take 10%, then divide by fully diluted outstanding shares — 142m for PTX.

Remember metallurgy losses, so I reduce by 20%. You might not be in that bull market reaching 10%; you might only achieve 5%, or if markets are rough, 2.5%.

Next, divide today's trading price by your calculated number. If the result exceeds five times the current stock price, David Stone would buy it, and Julian Baring would include it in his fund.

I think investors should understand this approach.

BM: Those are excellent points, but let me share a personal experience. I've visited 400-500 different projects. When new projects advertise and pump stocks, you get inside, invest money, and end up owning various stocks. Some performed so well that I wanted to share with family, so I gave away shares of my two top holdings to immediate family.

One was White Rock Minerals Ltd. (WRM:ASX; WRMCF:OTCQF) — we know White Rock because Silver47 Exploration Corp. (AGA:TSX.V; AAGAF:OTCQB) now owns that important Alaskan project. White Rock went bankrupt, and its shares became worthless.

I won't identify the other company because I like the people, but a company that invested $38 million in drilling over an existing mine, discovered nothing, and dropped 90%. Despite spending more time visiting projects than probably any other newsletter writer, I make mistakes too.

You're buying lottery tickets, and expecting to profit on every ticket is absurd. You'll make money on one or two stocks out of ten that succeed, but two or three will fail. Even White Rock held a $5 billion Alaskan resource and still went bankrupt.

RM: I understand completely. I've experienced this. Nobody's right 100% of the time, and the only protection is buying a bag of popcorn kernels.

We've discussed this — some pop dramatically, some are duds. You must buy the bag and throw them on the heat to see what pops. You can help yourself by slightly reducing risks.

BM: The biggest investor mistake, made consistently, is believing you're married to these stocks. If you buy stocks for profit, you can only achieve that by selling at a profit. I've seen stocks rise from $0.05 to $0.77 without the person selling.

They called asking my opinion, and I asked, "Why did you buy this stock initially?" "To make money," I said, if you went from five cents to 77 cents, why didn't you sell half or all? Then you're guaranteed a profit.

They didn't, and called years later, having sold at a loss. You're not marrying these stocks — they're lottery tickets, bubble-gum cards, and you only profit by trading.

RM: I agree, with the caveat that it might be a two-week, three-month, or six-month trade. You need patience to let management work.

Investors also chase momentum, churning accounts until all seed capital is burned. There's the old saying, "You make your money on the promotion" — I absolutely agree. Do you?

BM: Of course. I gauge market quality by advertiser numbers. In booming markets, I have 60 advertisers. In 2008-2009, I dropped to three or four. Nobody wanted marketing expenses when they don't see futures, and there's much of that frankly.

I measure sentiment and consider it vital. Marketing spending measures sentiment. If they believe markets are rising, they'll spend on marketing.

RM: When times are good, money flows; when not, wallets tighten, treasuries shrink, things contract, and like everyone else, they hunker down, surviving, making exchange payments, keeping people employed.

The past couple years have been terrible for juniors — a nightmare for many. They've emerged leaner, stronger, hopefully with better cash appreciation.

Things are improving; juniors are raising money and spending on advertising.

BM: Strangely, someone asked where we are in the gold bull market. He said, "In terms of innings, what inning are we in?" I said, "They just finished the national anthem."

RM: That's funny — I was asked the same thing; I said the pitcher's doing his five-ball warmup.

BM: Here's what's crazy: Investors look at account status — when accounts are down, they're down. I'm exactly opposite — when I see stocks crashing daily, I think it's wonderful because I know it will turn.

Something I learned 50 years ago: everything changes. Being in a bear market today doesn't matter because today's bear market becomes tomorrow's bull market. We've both experienced roaring bull markets — stocks like Harvest Gold, 2.5 cents to 9.5 cents, represent extraordinary gains.