I have been pounding the table for months believing we would have a general stock market high in September leading into a giant crash starting in October. And I believed there would be a liquidity event that would blast hell out of the "Everything Bubble."
It's here. I also suggested investors in resources get liquid in anticipation of shares going on the sales table by investors dumping at any price as the margin clerks began to call. I think that is here as well and I did my best to lighten up to free up some cash. Gold and silver have been correcting for the best part of a month and they are not finished yet.
Maple Gold Mines Ltd. (MGM:TSX.V; MGMLF:OTCQB; M3G:FSE) became a sponsor a month ago. I've been waiting for some important news or anything worth doing an article around and got it yesterday.
I do hope my readers understand the concept of leverage. If you are given the alternative of buying into either of two mining companies, one that can produce at $800 gold and one that would require $1200 gold. If you think gold is going to stay steady or go down, buy the company with the $800 gold. But on the other hand if you think gold is going a lot higher, buy the one with $1200 gold. You get far better leverage. A $200 move in gold makes them far more valuable than with the $800 an ounce producer.
Maple Gold is in the heart of Quebec with a 3.25 million ounce gold resource. An updated 43-101 is due this quarter. Over the life of the project more than $60 million CAD has been spent on drilling including a 6,000-meter drill program this year.
The President and CEO is Matthew Hornor who was VP for Ivanhoe for ten years. The management team largely is from Ivanhoe and highly experienced.
I could go more into the specifics of the company but they have done a fine job on the presentation and anyone interested should read it carefully. It's right up to date. As of the 30th of June, the company had $4.4 million over their obligations but since then cash has gone down to about $3.5 million CAD.
While I was searching around for a hook to do a story on, I casually looked at the price of the shares. I had bought some at $0.095 and was thrilled to get them. Yesterday I watched the price go down to $0.07. Remember, this was a $0.46 stock less than three years ago. The only things that have changed have changed for the better but bored shareholders have tanked the stock by 85%. I leapt on a bunch of shares at $0.07 because I can both add and subtract.
Yesterday the company had about a $16 million market cap with $3.5 million in the till. Convert to USD for simplicity, that's $13 million CAD enterprise value and $9.8 million USD with 3.25 million ounces. That is within spitting distance of $3 an ounce USD.
If you even like gold, you are never going to see a better deal than gold at $3 an ounce. There are only two things that can possibly happen. Gold goes to zero and "Bitcon" takes over the world, or we go into QE infinity and gold goes a lot higher.
Look for a lot higher gold. And a lot higher Maple Gold Mines shares. Management's only error has been to hide their light under a bushel. They need to let it shine.
Maple is an advertiser. I own a bunch of shares bought in the open market. Naturally I am biased so do your own due diligence. I share neither your profit nor your losses.
Maple Gold Mines
MGM-V $0.075 (Oct 01, 2019)
MGMLF-OTCBB 237.4 million shares
Maple 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: Maple Gold Mines. Maple Gold Mines 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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